<div class="phx-topic abstract-wrapper">Larger components are pushing handling boundaries with an increasing number of locations too small to accommodate growing cargo sizes.</div>

Larger components are pushing handling boundaries with an increasing number of locations too small to accommodate growing cargo sizes.

Feature image

<div class="phx-topic">The increasing size and complexity of project cargoes is demanding increasingly sophisticated engineering solutions and pushing the boundaries of transport capabilities, project cargo experts say.Speaking to the Journal of Commerce, Hagen Hennig, technical director at dteq Transport Engineering Solutions, described project cargo as “getting more engineering-heavy.” Where dteq only needed two engineers to support the group at start up, the company now counts 50-plus engineers. “That’s a good indication of how the cargo and the project requirements have evolved,” Hennig said. He also noted the impact of that growth on multipurpose vessel capabilities. ”Vessels need to be stronger to accommodate these larger cargoes, which can be seen in the increase in crane capacities and the growing fleet of deck carriers,” Hennig said.Cosmatos Group last year moved the largest cargo it had moved in its 53-year history, handling a 690-ton, nine-meter-high component. Elisabeth Cosmatos, CEO of Cosmatos Group and president of The Heavy Lift Group (THLG), described the move as a “milestone,” but also a challenge. There is also a growing emphasis on technical know-how, with Hennig noting the transport engineering mindset in clients is increasing. ”It is not only about having the best product, it is also about being able to transport that product safely and cost efficiently to its destination,” he said.Hennig stressed the role of engineering in expanding possibilities. ”With engineering you can always push boundaries further,” he said, giving the example of regular transportation of 1000-plus ton nacelles for the wind energy market that were unimaginable previously. <h3>Infrastructure limitations pose challenges</h3>Still, both Hennig and colleague Boris Dykiert, commercial director with dteq Transport Engineering Solutions, acknowledged inherent limitations. ”It’s important to consider the existing infrastructure and environment too,” Dykiert said. “For example, it is already very difficult to get out of some ports in Europe to (the) site with the latest generation of wind blades due to tight turns.” Hennig added that there is a limit to maximum size depending on available infrastructure.“If the project is next to the port and that port is deep with good moorings, that helps,” he said. “But the last mile needs to be there, too. That will determine the maximum cargo envelope.”Speaking on a panel at Breakbulk Europe in mid-May, Richard Kaladji, head of the project logistics department at Air Liquide, affirmed the trend of increasing cargo sizes and underlined the heightened risks involved. ”Today, the challenge is greater as you cannot mess up,” he said. “You have to validate the solution many times as the stakes are higher with larger cargoes.”Contact Carly Fields <a href="mailto:carly.fields@spglobal.com">at carly.fields@spglobal.com</a>.</div>

The increasing size and complexity of project cargoes is demanding increasingly sophisticated engineering solutions and pushing the boundaries of transport capabilities, project cargo experts say. Speaking to the Journal of Commerce, Hagen Hennig, technical director at dteq Transport Engineering Solutions, described project cargo as “getting more engineering-heavy.” Where dteq only needed two engineers to support the group at start up, the company now counts 50-plus engineers. “That’s a good indication of how the cargo and the project requirements have evolved,” Hennig said. He also noted the impact of that growth on multipurpose vessel capabilities. ”Vessels need to be stronger to accommodate these larger cargoes, which can be seen in the increase in crane capacities and the growing fleet of deck carriers,” Hennig said. Cosmatos Group last year moved the largest cargo it had moved in its 53-year history, handling a 690-ton, nine-meter-high component. Elisabeth Cosmatos, CEO of Cosmatos Group and president of The Heavy Lift Group (THLG), described the move as a “milestone,” but also a challenge. There is also a growing emphasis on technical know-how, with Hennig noting the transport engineering mindset in clients is increasing. ”It is not only about having the best product, it is also about being able to transport that product safely and cost efficiently to its destination,” he said. Hennig stressed the role of engineering in expanding possibilities. ”With engineering you can always push boundaries further,” he said, giving the example of regular transportation of 1000-plus ton nacelles for the wind energy market that were unimaginable previously. Infrastructure limitations pose challenges Still, both Hennig and colleague Boris Dykiert, commercial director with dteq Transport Engineering Solutions, acknowledged inherent limitations. ”It’s important to consider the existing infrastructure and environment too,” Dykiert said. “For example, it is already very difficult to get out of some ports in Europe to (the) site with the latest generation of wind blades due to tight turns.” Hennig added that there is a limit to maximum size depending on available infrastructure. “If the project is next to the port and that port is deep with good moorings, that helps,” he said. “But the last mile needs to be there, too. That will determine the maximum cargo envelope.” Speaking on a panel at Breakbulk Europe in mid-May, Richard Kaladji, head of the project logistics department at Air Liquide, affirmed the trend of increasing cargo sizes and underlined the heightened risks involved. ”Today, the challenge is greater as you cannot mess up,” he said. “You have to validate the solution many times as the stakes are higher with larger cargoes.” Contact Carly Fields at carly.fields@spglobal.com .

Energy projects

Project cargo

Breakbulk News

Growing project cargo scale testing transport limitations, but driving innovation

<div class="phx-topic abstract-wrapper">The carrier continues to ramp up its non-ocean businesses that were acquired from Performance Team with the lease of a new warehouse located about 10 miles from the Port of Philadelphia.</div>

The carrier continues to ramp up its non-ocean businesses that were acquired from Performance Team with the lease of a new warehouse located about 10 miles from the Port of Philadelphia.

<div class="phx-topic">Maersk has added to its North American portfolio with the lease of one of the largest warehouses in southern New Jersey. The move comes as Maersk flagged better growth in its warehousing and related businesses during its most recent earnings release. Maersk confirmed media reports that it leased the 1.2-million-square-foot Box Park Logistics Center, located about 10 miles from the Port of Philadelphia and roughly 80 miles from the Port of New York and New Jersey. The facility, built in 2023, has 215 dock doors and can be expanded by another 300,000 square feet. The region where the warehouse is located has seen new construction plummet amid increasing industrial property vacancies in the Northeast US. Commercial realtor CBRE said in May that new warehouse construction in the south New Jersey-Philadelphia metro region totaled 11.6 million square feet in the first quarter of 2025, down 25.3% from the fourth quarter of 2024. Vacancy rates for Northeast warehouses reached 7.6% in the first quarter, compared to around 3% in 2022, marking 12 quarters of increasing vacancy rates. Maersk said in its first-quarter earnings release that it expects vacancy rates to remain close to the long-term 7% average as new construction better matches demand. Maersk’s fulfillment business, comprised mostly of the <a href="https://www.joc.com/article/maersk-acquisition-deepens-north-american-warehouse-reach-5213428">former Performance Team business</a>, saw first-quarter revenue fall 7% to $1.32 billion as it reorganized its last-mile and middle-mile business in North America. However, Maersk Chief Executive Vincent Clerc said the company’s warehousing and e-commerce fulfillment “increased in volumes with growth in new customers.” Maersk’s contract logistics business was also more profitable in the 2025 first quarter, with operating profit margin reaching 4.1% from 1.5% a year earlier. Clerc said warehousing and e-commerce fulfillment helped drive the better results. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Maersk has added to its North American portfolio with the lease of one of the largest warehouses in southern New Jersey. The move comes as Maersk flagged better growth in its warehousing and related businesses during its most recent earnings release. Maersk confirmed media reports that it leased the 1.2-million-square-foot Box Park Logistics Center, located about 10 miles from the Port of Philadelphia and roughly 80 miles from the Port of New York and New Jersey. The facility, built in 2023, has 215 dock doors and can be expanded by another 300,000 square feet. The region where the warehouse is located has seen new construction plummet amid increasing industrial property vacancies in the Northeast US. Commercial realtor CBRE said in May that new warehouse construction in the south New Jersey-Philadelphia metro region totaled 11.6 million square feet in the first quarter of 2025, down 25.3% from the fourth quarter of 2024. Vacancy rates for Northeast warehouses reached 7.6% in the first quarter, compared to around 3% in 2022, marking 12 quarters of increasing vacancy rates. Maersk said in its first-quarter earnings release that it expects vacancy rates to remain close to the long-term 7% average as new construction better matches demand. Maersk’s fulfillment business, comprised mostly of the former Performance Team business , saw first-quarter revenue fall 7% to $1.32 billion as it reorganized its last-mile and middle-mile business in North America. However, Maersk Chief Executive Vincent Clerc said the company’s warehousing and e-commerce fulfillment “increased in volumes with growth in new customers.” Maersk’s contract logistics business was also more profitable in the 2025 first quarter, with operating profit margin reaching 4.1% from 1.5% a year earlier. Clerc said warehousing and e-commerce fulfillment helped drive the better results. Contact Michael Angell at michael.angell@spglobal.com .

Maritime

Container Shipping News

Port News

Port infrastructure

Container lines

Maersk’s contract logistics business adds New Jersey warehouse

<div class="phx-topic abstract-wrapper">Adding to recent capacity cutbacks, the carrier has redeployed vessels serving its premier Himalaya Express service between India, Europe and the Mediterranean onto Asian trades.</div>

Adding to recent capacity cutbacks, the carrier has redeployed vessels serving its premier Himalaya Express service between India, Europe and the Mediterranean onto Asian trades.

<div class="phx-topic">More signs are emerging of mainline operators with larger Indian market share strategically adjusting their networks amid a rush of cargo bookings out of China that is already testing supply chains at many Asian hub ports. Adding to recent capacity cutbacks on the India-US East Coast trade, Mediterranean Shipping Co. has redeployed vessels serving its premier Himalaya Express (HEX) service between India, Europe and the Mediterranean onto Asian trades, updated schedule data obtained by the Journal of Commerce shows. Out of five upcoming HEX sailings already declared for berthing at India’s Nhava Sheva Port through early July, four vessels have their origin load ports in China, reflecting large-scale cargo relay plans. For example, the MSC Sindy, due to dock at Nhava Sheva on June 5, has made calls to Shanghai, Ningbo and Singapore in what is evidently an ad-hoc rotation. “We are now seeing a lot of impromptu changes for MSC services out of India, with vessels swapped out and port calls rejigged,” a Mumbai-based freight forwarder who did not want to be identified told the Journal of Commerce. “The Asia surge seems to be driving that capacity shakeup.” Sources also noted that the Geneva-based liner is considering adding Vizhinjam Port in southern India to the HEX rotation, likely for the interim to support resurgent transshipment volumes, beginning with the MSC Nairobi X due to arrive in Nhava Sheva on June 9. With multiple changes in the cards, the service will now cover Nhava Sheva, Mundra, Vizhinjam, Sines, Valencia, Gioia Tauro, Genoa, Barcelona and Malaga, the sources said. The weekly HEX has long used a fleet of large-size vessels — averaging 15,000 TEUs in capacity — with a strong schedule reliability track record. MSC recently reset the HEX berthing window in Nhava Sheva by shifting calls from the DP World terminal to PSA International’s facility for greater operational flexibility. Additionally, MSC’s IPAK service (India-Europe) has no sailing in the current week, port berthing data indicates. Sliding vessel schedules extend to other Indian networks. A South India/North Europe/Mediterranean/Oceania loop run jointly by MSC and CMA CGM, branded as the Australia Express and NEWMO, respectively, has voided direct calls to Ennore Port (Chennai) in late May, tightening capacity out of the region that has fewer long-haul network options. “Space issues have started for bookings to Europe and we expect westbound rates to move up,” a Chennai-based forwarder said. MSC and CMA CGM have already rolled $800 per container into West India-Europe spot pricing from this week, sources said. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

More signs are emerging of mainline operators with larger Indian market share strategically adjusting their networks amid a rush of cargo bookings out of China that is already testing supply chains at many Asian hub ports. Adding to recent capacity cutbacks on the India-US East Coast trade, Mediterranean Shipping Co. has redeployed vessels serving its premier Himalaya Express (HEX) service between India, Europe and the Mediterranean onto Asian trades, updated schedule data obtained by the Journal of Commerce shows. Out of five upcoming HEX sailings already declared for berthing at India’s Nhava Sheva Port through early July, four vessels have their origin load ports in China, reflecting large-scale cargo relay plans. For example, the MSC Sindy, due to dock at Nhava Sheva on June 5, has made calls to Shanghai, Ningbo and Singapore in what is evidently an ad-hoc rotation. “We are now seeing a lot of impromptu changes for MSC services out of India, with vessels swapped out and port calls rejigged,” a Mumbai-based freight forwarder who did not want to be identified told the Journal of Commerce. “The Asia surge seems to be driving that capacity shakeup.” Sources also noted that the Geneva-based liner is considering adding Vizhinjam Port in southern India to the HEX rotation, likely for the interim to support resurgent transshipment volumes, beginning with the MSC Nairobi X due to arrive in Nhava Sheva on June 9. With multiple changes in the cards, the service will now cover Nhava Sheva, Mundra, Vizhinjam, Sines, Valencia, Gioia Tauro, Genoa, Barcelona and Malaga, the sources said. The weekly HEX has long used a fleet of large-size vessels — averaging 15,000 TEUs in capacity — with a strong schedule reliability track record. MSC recently reset the HEX berthing window in Nhava Sheva by shifting calls from the DP World terminal to PSA International’s facility for greater operational flexibility. Additionally, MSC’s IPAK service (India-Europe) has no sailing in the current week, port berthing data indicates. Sliding vessel schedules extend to other Indian networks. A South India/North Europe/Mediterranean/Oceania loop run jointly by MSC and CMA CGM, branded as the Australia Express and NEWMO, respectively, has voided direct calls to Ennore Port (Chennai) in late May, tightening capacity out of the region that has fewer long-haul network options. “Space issues have started for bookings to Europe and we expect westbound rates to move up,” a Chennai-based forwarder said. MSC and CMA CGM have already rolled $800 per container into West India-Europe spot pricing from this week, sources said. Contact Bency Mathew at bencyvmathew@gmail.com .

Asia-Europe

MSC juggles India-Europe network rotations amid Asia cargo rush

<div class="phx-topic abstract-wrapper">Carriers are looking to ride the higher rates as long as they can before the fresh vessel capacity that is making its way to the trans-Pacific begins to dull the momentum.</div>

Carriers are looking to ride the higher rates as long as they can before the fresh vessel capacity that is making its way to the trans-Pacific begins to dull the momentum.

<div class="phx-topic">Trans-Pacific spot rates are rising at a faster clip than the pandemic-linked boom in the spring of 2021 amid a spike in imports from Asia driven by the temporary pause in tariff hikes put in place by the Trump administration. An ocean carrier executive said liners are being “very aggressive on spot rates” to capitalize on the cargo surge, with so-called general rate increases (GRIs) implemented on June 1 and two other price hikes planned for mid-June and July 1. A half-dozen forwarders told the Journal of Commerce that spot rates this week are in the low $6,000s per FEU to the US West Coast and low $7,000s to the East Coast. Rate indexes, which take a week or two to capture the full rate gains, still showed a big jump this week. Platts, a sister company of the Journal of Commerce within S&amp;P Global, listed the spot rate from Asia to the West Coast as of Monday at $5,600 per FEU, up 33% from just last week. The East Coast rate was $6,500 per FEU, up 25%. Platts data shows the West Coast spot rate has rocketed 173% higher since mid-April, with the East Coast rate doubling over that time. By comparison, as US imports from Asia began to climb in May 2021 following the COVID-related slump, spot rates to the US rose about 20% from mid-April. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e8c13a3e-9f5a-412f-8741-adbf5e1a7779"></dynamic-object></div>Carriers are looking to ride the higher rates as long as they can before the fresh vessel capacity that is making its way to the trans-Pacific in the form of extra-loaders and new services begins to dull the momentum. “It seems like the next [rate] increase or two will be the last ones,” said Jason Cook, CEO of Ardent Global Logistics. “I’m getting the impression that this capacity is already finding its way into the trade.” The new capacity is especially significant on the trade lanes from Asia to the West Coast. Carriers in June have increased capacity by 12.8% and plan another 16.5% hike in July, Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said in his Sunday Spotlight newsletter. “In total, this is an injection of 397,000 TEUs of capacity in June/July compared to the situation just three weeks ago,” Murphy said. <h3>Import surge coming to Southern California </h3>The surge in imports from Asia is tied to the Trump administration’s time-limited pause in higher tariffs. The pauses are expiring over the next two months — one on July 9 on imports from most nations except for China, and another in mid-August on the huge <a href="https://www.joc.com/article/federal-court-ruling-blocking-tariffs-resets-shipping-outlook-6013402">145% tariff on imports from China that has been reduced to 30%</a>. The White House says it is busy negotiating new trade deals in the meantime. As those deadlines approach, the import spike is manifesting itself in the Los Angeles-Long Beach port complex, which handles about 50% of US imports from Asia. According to data from both ports, the Southern California complex is projecting a huge volume of imports over the next few weeks. Los Angeles, which this week will handle about 92,000 TEUs of laden imports, is forecasting more than 103,000 TEUs next week and 112,000 TEUs in the week of June 15. Long Beach, which will handle about 75,000 import TEUs next week, is projecting imports of more than 90,000 TEUs per week during the last three weeks of June. “Clearly shippers are trying to catch up on lost time out of China,” one forwarder said. Bookings out of Southeast Asia are quite strong, while bookings from China, which spiked after the May 12 “pause” announcement, are now “slightly weaker, but nothing that will throw the trade off,” said James Caradonna, executive vice president of the forwarder Spedag America. <h3>Short, but intense, peak season expected </h3>Based on the significant level of frontloading that has already taken place from Southeast Asia and China, forwarders say this year’s peak shipping season will start earlier and be noticeably shorter than typical peak seasons, which run from August through October. “The peak season has already started,” said Christian Sur, executive vice president of ocean freight contract logistics at the forwarder Unique Logistics International. “The peak of the peak will be in the second half of June.” For that reason, carriers are attempting to maintain cargo flow and bookings from their core customers so that when imports fall off, liners will maintain what business is left for the remainder of the year, the carrier executive said. Carriers right now are slow-walking peak season surcharges (PSSs), which are applied to cargo owners’ service contracts and forwarders’ named-account (NAC) rates, even while they announce additional spot rate increases, the executive said. “The lines are very cautious about PSSs...,” the source said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. Contact Laura Robb at <a href="mailto:laura.robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

Trans-Pacific spot rates are rising at a faster clip than the pandemic-linked boom in the spring of 2021 amid a spike in imports from Asia driven by the temporary pause in tariff hikes put in place by the Trump administration. An ocean carrier executive said liners are being “very aggressive on spot rates” to capitalize on the cargo surge, with so-called general rate increases (GRIs) implemented on June 1 and two other price hikes planned for mid-June and July 1. A half-dozen forwarders told the Journal of Commerce that spot rates this week are in the low $6,000s per FEU to the US West Coast and low $7,000s to the East Coast. Rate indexes, which take a week or two to capture the full rate gains, still showed a big jump this week. Platts, a sister company of the Journal of Commerce within S&P Global, listed the spot rate from Asia to the West Coast as of Monday at $5,600 per FEU, up 33% from just last week. The East Coast rate was $6,500 per FEU, up 25%. Platts data shows the West Coast spot rate has rocketed 173% higher since mid-April, with the East Coast rate doubling over that time. By comparison, as US imports from Asia began to climb in May 2021 following the COVID-related slump, spot rates to the US rose about 20% from mid-April. Carriers are looking to ride the higher rates as long as they can before the fresh vessel capacity that is making its way to the trans-Pacific in the form of extra-loaders and new services begins to dull the momentum. “It seems like the next [rate] increase or two will be the last ones,” said Jason Cook, CEO of Ardent Global Logistics. “I’m getting the impression that this capacity is already finding its way into the trade.” The new capacity is especially significant on the trade lanes from Asia to the West Coast. Carriers in June have increased capacity by 12.8% and plan another 16.5% hike in July, Alan Murphy, CEO of Sea-Intelligence Maritime Analysis, said in his Sunday Spotlight newsletter. “In total, this is an injection of 397,000 TEUs of capacity in June/July compared to the situation just three weeks ago,” Murphy said. Import surge coming to Southern California The surge in imports from Asia is tied to the Trump administration’s time-limited pause in higher tariffs. The pauses are expiring over the next two months — one on July 9 on imports from most nations except for China, and another in mid-August on the huge 145% tariff on imports from China that has been reduced to 30% . The White House says it is busy negotiating new trade deals in the meantime. As those deadlines approach, the import spike is manifesting itself in the Los Angeles-Long Beach port complex, which handles about 50% of US imports from Asia. According to data from both ports, the Southern California complex is projecting a huge volume of imports over the next few weeks. Los Angeles, which this week will handle about 92,000 TEUs of laden imports, is forecasting more than 103,000 TEUs next week and 112,000 TEUs in the week of June 15. Long Beach, which will handle about 75,000 import TEUs next week, is projecting imports of more than 90,000 TEUs per week during the last three weeks of June. “Clearly shippers are trying to catch up on lost time out of China,” one forwarder said. Bookings out of Southeast Asia are quite strong, while bookings from China, which spiked after the May 12 “pause” announcement, are now “slightly weaker, but nothing that will throw the trade off,” said James Caradonna, executive vice president of the forwarder Spedag America. Short, but intense, peak season expected Based on the significant level of frontloading that has already taken place from Southeast Asia and China, forwarders say this year’s peak shipping season will start earlier and be noticeably shorter than typical peak seasons, which run from August through October. “The peak season has already started,” said Christian Sur, executive vice president of ocean freight contract logistics at the forwarder Unique Logistics International. “The peak of the peak will be in the second half of June.” For that reason, carriers are attempting to maintain cargo flow and bookings from their core customers so that when imports fall off, liners will maintain what business is left for the remainder of the year, the carrier executive said. Carriers right now are slow-walking peak season surcharges (PSSs), which are applied to cargo owners’ service contracts and forwarders’ named-account (NAC) rates, even while they announce additional spot rate increases, the executive said. “The lines are very cautious about PSSs...,” the source said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com . Contact Laura Robb at laura.robb@spglobal.com .

Forwarding

Trans-Pacific

Pause in tariff hikes drives big gains in trans-Pacific spot rates

<div class="phx-topic abstract-wrapper">Hauling containers between Mexico and the US comes with additional regulations and potential disruptions that could make the 95% on-time performance promise more challenging for Hunt’s new cross-border service.</div>

Hauling containers between Mexico and the US comes with additional regulations and potential disruptions that could make the 95% on-time performance promise more challenging for Hunt’s new cross-border service.

<div class="phx-topic">J.B. Hunt wants to do what few have pulled off in long-haul intermodal: achieve 95% on-time performance. That is incredibly difficult for any 2,000-mile haul, but even more so on cross-border freight in Mexico, where the journey for J.B. Hunt requires two railroads, a manual customs clearance process, and a single-track bridge that routinely clogs one of North America’s busiest trade corridors. It’s a daunting task facing the intermodal giant as it handles the first <a href="https://www.joc.com/article/jb-hunt-launching-quantum-de-mexico-for-time-sensitive-cross-border-freight-6014579">Quantum de México</a> containers in the coming months. J.B. Hunt will team up with BNSF Railway and Grupo México Transportes (GMXT), the majority owner of Mexican railroad Ferromex. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6017110_0.1.jpg"></img></div>The <a href="https://www.joc.com/article/j-b-hunt-bnsf-launch-new-intermodal-service-to-grab-time-sensitive-freight-5215574">Quantum product</a> was introduced in 2023 as a US domestic service by Hunt and BNSF, promising tight delivery windows. According to J.B. Hunt, the service has consistently met or exceeded its on-time targets, although the company declined to provide performance data. The value proposition behind Quantum is simple: promise reliability and on-time performance to shippers using a mode that has struggled with both. Intermodal rail can be fast and dependable, but every few years, service degrades significantly for a multitude of reasons. “Most customers have appointment windows, so once we understand their expectations, we design transit and pickup schedules all the way back to the initial tender,” Spencer Frazier, executive vice president of sales for J.B. Hunt, told the Journal of Commerce. “For Quantum de México, it’s how our customers define 95% on time, not Ferromex, BNSF or us.” The formula can work in the US, where BNSF and J.B. Hunt are closely aligned and can fall back on J.B. Hunt’s 19,000-truck fleet to make up for rail hiccups. Cross-border service, though, is a different beast. Nevertheless, the market potential in Mexico is significant. In 2024, Mexico’s trade surplus with the US for automotive goods hit a record $137.8 billion, a 6% increase from the previous year, according to the US Department of Commerce. Total US imports from Mexico reached $505.9 billion, up 6.4% year over year. With nearshoring trends gaining momentum, Hunt’s competitors are investing aggressively. Last October, Hub Group formed a <a href="https://www.joc.com/article/hub-group-boosts-cross-border-business-in-jv-with-mexican-dray-carrier-5745355">joint venture with Easo</a>, a leading intermodal operator in Mexico. Schneider National has expanded its relationship with Canadian Pacific Kansas City (CPKC), offering service from <a href="https://www.joc.com/article/cpkc-csx-to-launch-joint-mexico-southeast-us-service-dec-1-5790107">Mexico to the US Southeast</a>, and boasts the only single-rail service between Mexico and Chicago. <h3>Getting out of Mexico </h3>One of the most immediate hurdles for Quantum de México is the customs clearance process. Before a container can even be loaded, physical paperwork must be presented and stamped at the terminal. Outside of Monterrey, customs offices are open only during weekday business hours and a few hours on Saturdays. That leaves a narrow daily window to get freight cleared and loaded. “We’re not running Quantum de Mexico service at wacky hours when there’s no customs office open,” Luis Hernández, GMXT’s vice president of intermodal, told the Journal of Commerce. “We’re working within the existing process to clear cargo during office hours and move it accordingly.” But miss that limited processing window and achieving the service guarantee becomes difficult. If there is a problem while the train is in transit, a new set of issues arises. In the US, BNSF can unload the container and place it onto J.B. Hunt’s extensive truck fleet. In Mexico, however, J.B. Hunt does not own trucks or employ company drivers. It must rely on third-party trucking companies. Jon Gabriel, BNSF’s group vice president for consumer products, said contingency plans are ready if a disruption occurs between Monterrey and the border. “It includes lift capability at Eagle Pass [Texas] itself,” he said. “We can drop a container there and use the J.B. Hunt truck fleet to recover if something happens en route. We have many of the same levers and processes in place as we do in US.” <h3>Crossing into the US </h3>Having a backup plan in Eagle Pass is important because the US-Mexico border comes with its own set of complications. Crossing the old, single-track bridge between Piedras Negras, Mexico, and Eagle Pass requires three separate crews: a Mexican crew to bring the train to the border, a second to take it across the bridge, and a third US crew to haul it north. “Trains come to a complete stop so the hand-off crew can disembark and walk back to their side of the border,” Union Pacific wrote in a recent <a href="https://www.up.com/aboutup/community/inside_track/safer-border-operations-it-250523.htm">online post</a>. The process can take up to 40 minutes and increases the risk of cargo theft and congestion trickling down to other trains. CPKC and Schneider <a href="https://www.joc.com/article/cpkcs-bridge-expansion-boosts-us-mexico-capacity-reliability-5908449">bypass these delays entirely</a> with the bridge in Laredo that opened a second span last December. UP last month <a href="https://www.up.com/aboutup/community/inside_track/safer-border-operations-it-250523.htm">completed a pilot program</a> in which Mexican crews were allowed to bring trains directly into its Eagle Pass terminal, reducing its exposure to theft, border delays and crew changes easily taking a half hour. BNSF hasn’t tested such options with customs agencies on both sides of the border, but says the single-track bridge isn’t limiting operations. “Physical bridge capacity is not a constraint,” BNSF’s Gabriel said. “The train from Monterrey to [Fort Worth] is consistently beating its schedule. The route will not limit our ability to meet the service commitments to our customers.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

J.B. Hunt wants to do what few have pulled off in long-haul intermodal: achieve 95% on-time performance. That is incredibly difficult for any 2,000-mile haul, but even more so on cross-border freight in Mexico, where the journey for J.B. Hunt requires two railroads, a manual customs clearance process, and a single-track bridge that routinely clogs one of North America’s busiest trade corridors. It’s a daunting task facing the intermodal giant as it handles the first Quantum de México containers in the coming months. J.B. Hunt will team up with BNSF Railway and Grupo México Transportes (GMXT), the majority owner of Mexican railroad Ferromex. The Quantum product was introduced in 2023 as a US domestic service by Hunt and BNSF, promising tight delivery windows. According to J.B. Hunt, the service has consistently met or exceeded its on-time targets, although the company declined to provide performance data. The value proposition behind Quantum is simple: promise reliability and on-time performance to shippers using a mode that has struggled with both. Intermodal rail can be fast and dependable, but every few years, service degrades significantly for a multitude of reasons. “Most customers have appointment windows, so once we understand their expectations, we design transit and pickup schedules all the way back to the initial tender,” Spencer Frazier, executive vice president of sales for J.B. Hunt, told the Journal of Commerce. “For Quantum de México, it’s how our customers define 95% on time, not Ferromex, BNSF or us.” The formula can work in the US, where BNSF and J.B. Hunt are closely aligned and can fall back on J.B. Hunt’s 19,000-truck fleet to make up for rail hiccups. Cross-border service, though, is a different beast. Nevertheless, the market potential in Mexico is significant. In 2024, Mexico’s trade surplus with the US for automotive goods hit a record $137.8 billion, a 6% increase from the previous year, according to the US Department of Commerce. Total US imports from Mexico reached $505.9 billion, up 6.4% year over year. With nearshoring trends gaining momentum, Hunt’s competitors are investing aggressively. Last October, Hub Group formed a joint venture with Easo , a leading intermodal operator in Mexico. Schneider National has expanded its relationship with Canadian Pacific Kansas City (CPKC), offering service from Mexico to the US Southeast , and boasts the only single-rail service between Mexico and Chicago. Getting out of Mexico One of the most immediate hurdles for Quantum de México is the customs clearance process. Before a container can even be loaded, physical paperwork must be presented and stamped at the terminal. Outside of Monterrey, customs offices are open only during weekday business hours and a few hours on Saturdays. That leaves a narrow daily window to get freight cleared and loaded. “We’re not running Quantum de Mexico service at wacky hours when there’s no customs office open,” Luis Hernández, GMXT’s vice president of intermodal, told the Journal of Commerce. “We’re working within the existing process to clear cargo during office hours and move it accordingly.” But miss that limited processing window and achieving the service guarantee becomes difficult. If there is a problem while the train is in transit, a new set of issues arises. In the US, BNSF can unload the container and place it onto J.B. Hunt’s extensive truck fleet. In Mexico, however, J.B. Hunt does not own trucks or employ company drivers. It must rely on third-party trucking companies. Jon Gabriel, BNSF’s group vice president for consumer products, said contingency plans are ready if a disruption occurs between Monterrey and the border. “It includes lift capability at Eagle Pass [Texas] itself,” he said. “We can drop a container there and use the J.B. Hunt truck fleet to recover if something happens en route. We have many of the same levers and processes in place as we do in US.” Crossing into the US Having a backup plan in Eagle Pass is important because the US-Mexico border comes with its own set of complications. Crossing the old, single-track bridge between Piedras Negras, Mexico, and Eagle Pass requires three separate crews: a Mexican crew to bring the train to the border, a second to take it across the bridge, and a third US crew to haul it north. “Trains come to a complete stop so the hand-off crew can disembark and walk back to their side of the border,” Union Pacific wrote in a recent online post . The process can take up to 40 minutes and increases the risk of cargo theft and congestion trickling down to other trains. CPKC and Schneider bypass these delays entirely with the bridge in Laredo that opened a second span last December. UP last month completed a pilot program in which Mexican crews were allowed to bring trains directly into its Eagle Pass terminal, reducing its exposure to theft, border delays and crew changes easily taking a half hour. BNSF hasn’t tested such options with customs agencies on both sides of the border, but says the single-track bridge isn’t limiting operations. “Physical bridge capacity is not a constraint,” BNSF’s Gabriel said. “The train from Monterrey to [Fort Worth] is consistently beating its schedule. The route will not limit our ability to meet the service commitments to our customers.” Contact Ari Ashe at ari.ashe@spglobal.com .

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Mexico presents obstacles to meeting J.B. Hunt’s ‘Quantum’ guarantee

<div class="phx-topic abstract-wrapper">Despite sustained and pending capacity injections, major liners have the ability to alleviate short-term losses and produce healthy profits, writes Jeremy Masters.</div>

Despite sustained and pending capacity injections, major liners have the ability to alleviate short-term losses and produce healthy profits, writes Jeremy Masters.

<div class="phx-topic">The next two years are widely forecast to bring some lean times to carriers — even periods of red ink. Sustained injections of tonnage — new and secondhand — and a strong order book have been encouraged by a combination of money in the bank, the need for critical mass in new alliance structures and the drive toward alternative fuels. Unless world trade growth reaches unprecedented levels, there will be significant overcapacity for an extended period. And if the Red Sea fully reopens, that overcapacity will only be exacerbated. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6016882_0.1.jpg"></img></div>Why then, should carriers be optimistic about their ability to alleviate short-term losses and produce healthy profits over the cycle? For long-term watchers of the industry, the turning point for the carriers was the bankruptcy of Hanjin in 2016. Up until that point, carriers had a very poor return on capital and very little control over their future profits in a highly fragmented industry. The COVID-19 pandemic, and more recently the Red Sea crisis, were unusual events that gave an unexpected boost to carriers’ results. But Hanjin’s collapse was the catalyst for a consolidation which, alongside organic growth of the bigger players, means that today the top five carriers control 64.5% of global capacity, according to Alphaliner, while the top 10 control 84.1%. We can only speculate on the ultimate ambitions of Mediterranean Shipping Co., but most of the rest of the top 10 have ambitious fleet expansion plans — particularly CMA CGM and Cosco Shipping. Outside the top 10, there are few carriers that have significant growth plans, so the top 10’s percentage of world fleet will continue to rise. <h3>Controlling supply — and price </h3>The degree of consolidation that has taken place does not mean that carriers can defy rate gravity if there are unbridgeable gaps between supply and demand. But it does mean that in a down market, the biggest carriers can provide leadership by withdrawing whole strings. And in an up market, the carriers can act very quickly to increase rates, and as we have seen, amass big war chests. We will see some rocky periods ahead, but the carriers’ collective ability to control the supply lever, and thus price, has significantly increased. There is the less talked about factor that has also helped control the free supply of capacity — the reduction of the non-operating carrier fleet. The non-operating fleet and the leasing companies’ container fleets can be viewed as the elastic in the container shipping industry — helping carriers to meet incremental short-term capacity needs in different geographies, but on a bigger scale providing the opportunity to launch new products, especially for asset-poor new entrants. Alphaliner recently reported that the most traded sector of the charter market — 7,000- to 9,000-TEU ships — lost a massive 2.3 million TEUs of capacity in the last five years. It further reported that more than 3.7 million TEUs of non-operating capacity was sold to end-users between Aug. 20 and March 25, although this was partially offset by 1.2 million TEUs of new capacity delivered to non-operators and 221,000 TEUs bought from end-users. The biggest buyers were MSC and CMA CGM. How does this affect the charter market, the carriers who bought the tonnage, and the fluidity of the industry? <h3>Buoyant charter market </h3>Pundits have been shocked that the charter market has stayed as buoyant as it has. The Red Sea issue, the move from three to four east-to-west carrier groupings (counting MSC as a grouping) and intermittent congestion have all been important incremental demand generators. The fact that there have been shortages of ships available for charter in non-operating fleets, however, has also been pivotal. Carriers can be more creative with surplus assets and currently, at least, can bear less-than-optimal deployments. If non-operators get in a surplus position, they may have more need to be price-reactive. Ironically, then, the loss of some of their fleet to carriers has been a good thing for those non-operators who have held onto their assets. There is now less elasticity of supply in the charter market and more capability for non-operators to hold a firm line on price even when markets appear unfavorable, although similar to their operating carrier clients, they will not ultimately defy heavy gravity. We can assume the motives of MSC, CMA CGM and others for buying secondhand tonnage in smaller sizes from non-operators was based purely on perceived low asset prices and a desire to have greater control over north-to-south trades and regional feeders. The fact that this has limited the capability and the drive of the charter market to provide sharply priced tonnage to their competitors and any aspiring new entrants is, however, a helpful bonus. Contact Jeremy Masters at <a href="https://www.joc.com/article/jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>.</div>

The next two years are widely forecast to bring some lean times to carriers — even periods of red ink. Sustained injections of tonnage — new and secondhand — and a strong order book have been encouraged by a combination of money in the bank, the need for critical mass in new alliance structures and the drive toward alternative fuels. Unless world trade growth reaches unprecedented levels, there will be significant overcapacity for an extended period. And if the Red Sea fully reopens, that overcapacity will only be exacerbated. Why then, should carriers be optimistic about their ability to alleviate short-term losses and produce healthy profits over the cycle? For long-term watchers of the industry, the turning point for the carriers was the bankruptcy of Hanjin in 2016. Up until that point, carriers had a very poor return on capital and very little control over their future profits in a highly fragmented industry. The COVID-19 pandemic, and more recently the Red Sea crisis, were unusual events that gave an unexpected boost to carriers’ results. But Hanjin’s collapse was the catalyst for a consolidation which, alongside organic growth of the bigger players, means that today the top five carriers control 64.5% of global capacity, according to Alphaliner, while the top 10 control 84.1%. We can only speculate on the ultimate ambitions of Mediterranean Shipping Co., but most of the rest of the top 10 have ambitious fleet expansion plans — particularly CMA CGM and Cosco Shipping. Outside the top 10, there are few carriers that have significant growth plans, so the top 10’s percentage of world fleet will continue to rise. Controlling supply — and price The degree of consolidation that has taken place does not mean that carriers can defy rate gravity if there are unbridgeable gaps between supply and demand. But it does mean that in a down market, the biggest carriers can provide leadership by withdrawing whole strings. And in an up market, the carriers can act very quickly to increase rates, and as we have seen, amass big war chests. We will see some rocky periods ahead, but the carriers’ collective ability to control the supply lever, and thus price, has significantly increased. There is the less talked about factor that has also helped control the free supply of capacity — the reduction of the non-operating carrier fleet. The non-operating fleet and the leasing companies’ container fleets can be viewed as the elastic in the container shipping industry — helping carriers to meet incremental short-term capacity needs in different geographies, but on a bigger scale providing the opportunity to launch new products, especially for asset-poor new entrants. Alphaliner recently reported that the most traded sector of the charter market — 7,000- to 9,000-TEU ships — lost a massive 2.3 million TEUs of capacity in the last five years. It further reported that more than 3.7 million TEUs of non-operating capacity was sold to end-users between Aug. 20 and March 25, although this was partially offset by 1.2 million TEUs of new capacity delivered to non-operators and 221,000 TEUs bought from end-users. The biggest buyers were MSC and CMA CGM. How does this affect the charter market, the carriers who bought the tonnage, and the fluidity of the industry? Buoyant charter market Pundits have been shocked that the charter market has stayed as buoyant as it has. The Red Sea issue, the move from three to four east-to-west carrier groupings (counting MSC as a grouping) and intermittent congestion have all been important incremental demand generators. The fact that there have been shortages of ships available for charter in non-operating fleets, however, has also been pivotal. Carriers can be more creative with surplus assets and currently, at least, can bear less-than-optimal deployments. If non-operators get in a surplus position, they may have more need to be price-reactive. Ironically, then, the loss of some of their fleet to carriers has been a good thing for those non-operators who have held onto their assets. There is now less elasticity of supply in the charter market and more capability for non-operators to hold a firm line on price even when markets appear unfavorable, although similar to their operating carrier clients, they will not ultimately defy heavy gravity. We can assume the motives of MSC, CMA CGM and others for buying secondhand tonnage in smaller sizes from non-operators was based purely on perceived low asset prices and a desire to have greater control over north-to-south trades and regional feeders. The fact that this has limited the capability and the drive of the charter market to provide sharply priced tonnage to their competitors and any aspiring new entrants is, however, a helpful bonus. Contact Jeremy Masters at jeremy@shippingmastershk.com .

Current market allows top ocean carriers to strengthen long-term position

<div class="phx-topic abstract-wrapper">The Trump administration’s tariff policy is yet another milestone that has shaken the US economy over the past 60 years, writes Ted Prince. </div>

The Trump administration’s tariff policy is yet another milestone that has shaken the US economy over the past 60 years, writes Ted Prince.

<div class="phx-topic">Since the announcement of reciprocal tariffs on so-called “Liberation Day” last month, we have been bombarded by conflicting predictions of the possible benefits and disasters that may befall our country, our economy and our industry. What I find interesting is that the history of the past 60 years seems to have been forgotten. While there are many important dates, I will focus on four. <h3>Yanqui go home! </h3>I would start in April 1965, when President Lyndon Johnson deployed the Marines and 82nd Airborne to the Dominican Republic to quell a civil war that broke out after a military junta. While the intervention was intended to protect US nationals, mission creep led to the deployment of over 22,000 American troops. While the invasion successfully reinstalled a conservative government, it increased distrust of the US. At the same time, companies such as Hewlett Packard were rolling out a continuous pipeline of electronic innovations. Their intention was to near-shore manufacturing in Latin America; however, the prevalence of “Yanqui Go Home!” made them look elsewhere. Japan and then the “Four Tigers” (Singapore, Hong Kong, Taiwan and South Korea) became the factory sites instead. The Vietnam War had become the first containerized war, and plentiful equipment was available to load back to the US. While electronics required factories, much of the manufacturing was cottage industries. For example, importers of blue jeans were buying from hundreds of small vendors. Ocean carrier consolidators would send pickup trucks into the New Territories to pick up loose articles of clothing (some which no doubt had been made in China) for consolidation at their facilities adjacent to the Kwai Tsing container terminals. <h3>Voluntary restraint </h3>In May 1981, with the American auto industry mired in recession, Japanese car makers agreed to “voluntary export restraint,” which limited exports of passenger cars to the US. However, at the same time, they implemented a strategy of “transplants,” whereby cars were assembled in the US. Some might consider this an example of “reshoring;” however, it is not that simple. Initially, the plants were built in Japan, then disassembled, shipped to the US, and reassembled. Most of the parts (CKD: cars knocked down) came from Japan, so actual US content — other than labor — was minimal. Over time, suppliers proliferated along Interstates 65 and 75 to support these plants. However, many of these were also Japanese transplants. Some were joint ventures with US partners, but many were just US subsidiaries of Japanese manufacturers. Barry Bluestone and Bennett Harrison described this phenomenon in their 1982 work, “The Deindustrialization of America: Plant Closings, Community Abandonment, and the Dismantling of Basic Industry.” They pointed out the irony that the Japanese were successfully investing in US industrial sectors that scarcely a decade ago were said to be declining, uncompetitive, and suffering from deindustrialization. <h3>The Plaza Accord </h3>The Plaza Accord in September 1985 effectively devalued the dollar against other major currencies. Initially, the US trade deficit worsened, as imports rose in price with a devalued dollar. However, the devaluation made US exports cheaper for its trading partners to purchase, which grew the market in goods and services — which are unaccounted for in the current administration’s calculation. <h3>China and the WTO </h3>Finally, in 2001, China joined the World Trade Organization (WTO). What followed was a massive dislocation in trade as China built world-class factories and world-class ports to ship goods throughout the world. Some of those factories have since relocated to nations with cheaper labor. However, a whole ecosystem of suppliers has grown up that supports the manufacturing and assembly of sophisticated products. China’s development took over 30 years. It was no shortcut. It was also the result of extensive industrial policy similar to what Japan and the Four Tigers had done previously. Most importantly, these policies did not deviate for decades and supported a long-term strategy whereby investment could be made with confidence. Our current politics are such that it is impossible to invest in today’s doctrine because it may no longer be applicable by the time the factory opens in three to eight years. In the past 30 years, trade has increased dramatically as a share of gross domestic product (GDP). However, while most economists believe that this has been good for the economy, the general public’s outlook is less sanguine. In large part, this is because trade’s impacts can vary widely: localized changes in jobs (both gains and losses) and reduced prices of goods and services. Freight is inextricably linked to trade. It has transformed our industry. We will no doubt have a ringside seat to the policy that is evolving. Contact Ted Prince at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>. </div>

Since the announcement of reciprocal tariffs on so-called “Liberation Day” last month, we have been bombarded by conflicting predictions of the possible benefits and disasters that may befall our country, our economy and our industry. What I find interesting is that the history of the past 60 years seems to have been forgotten. While there are many important dates, I will focus on four. Yanqui go home! I would start in April 1965, when President Lyndon Johnson deployed the Marines and 82nd Airborne to the Dominican Republic to quell a civil war that broke out after a military junta. While the intervention was intended to protect US nationals, mission creep led to the deployment of over 22,000 American troops. While the invasion successfully reinstalled a conservative government, it increased distrust of the US. At the same time, companies such as Hewlett Packard were rolling out a continuous pipeline of electronic innovations. Their intention was to near-shore manufacturing in Latin America; however, the prevalence of “Yanqui Go Home!” made them look elsewhere. Japan and then the “Four Tigers” (Singapore, Hong Kong, Taiwan and South Korea) became the factory sites instead. The Vietnam War had become the first containerized war, and plentiful equipment was available to load back to the US. While electronics required factories, much of the manufacturing was cottage industries. For example, importers of blue jeans were buying from hundreds of small vendors. Ocean carrier consolidators would send pickup trucks into the New Territories to pick up loose articles of clothing (some which no doubt had been made in China) for consolidation at their facilities adjacent to the Kwai Tsing container terminals. Voluntary restraint In May 1981, with the American auto industry mired in recession, Japanese car makers agreed to “voluntary export restraint,” which limited exports of passenger cars to the US. However, at the same time, they implemented a strategy of “transplants,” whereby cars were assembled in the US. Some might consider this an example of “reshoring;” however, it is not that simple. Initially, the plants were built in Japan, then disassembled, shipped to the US, and reassembled. Most of the parts (CKD: cars knocked down) came from Japan, so actual US content — other than labor — was minimal. Over time, suppliers proliferated along Interstates 65 and 75 to support these plants. However, many of these were also Japanese transplants. Some were joint ventures with US partners, but many were just US subsidiaries of Japanese manufacturers. Barry Bluestone and Bennett Harrison described this phenomenon in their 1982 work, “The Deindustrialization of America: Plant Closings, Community Abandonment, and the Dismantling of Basic Industry.” They pointed out the irony that the Japanese were successfully investing in US industrial sectors that scarcely a decade ago were said to be declining, uncompetitive, and suffering from deindustrialization. The Plaza Accord The Plaza Accord in September 1985 effectively devalued the dollar against other major currencies. Initially, the US trade deficit worsened, as imports rose in price with a devalued dollar. However, the devaluation made US exports cheaper for its trading partners to purchase, which grew the market in goods and services — which are unaccounted for in the current administration’s calculation. China and the WTO Finally, in 2001, China joined the World Trade Organization (WTO). What followed was a massive dislocation in trade as China built world-class factories and world-class ports to ship goods throughout the world. Some of those factories have since relocated to nations with cheaper labor. However, a whole ecosystem of suppliers has grown up that supports the manufacturing and assembly of sophisticated products. China’s development took over 30 years. It was no shortcut. It was also the result of extensive industrial policy similar to what Japan and the Four Tigers had done previously. Most importantly, these policies did not deviate for decades and supported a long-term strategy whereby investment could be made with confidence. Our current politics are such that it is impossible to invest in today’s doctrine because it may no longer be applicable by the time the factory opens in three to eight years. In the past 30 years, trade has increased dramatically as a share of gross domestic product (GDP). However, while most economists believe that this has been good for the economy, the general public’s outlook is less sanguine. In large part, this is because trade’s impacts can vary widely: localized changes in jobs (both gains and losses) and reduced prices of goods and services. Freight is inextricably linked to trade. It has transformed our industry. We will no doubt have a ringside seat to the policy that is evolving. Contact Ted Prince at ted@tricitiesintermodal.com .

Supply chain

Transport, Trade and Regulation News

A history lesson while we watch current US trade policy unfold

<div class="phx-topic abstract-wrapper">The new global trade environment has significantly increased supply chain challenges, notably the arbitrary nature of the implementation of US tariffs.</div>

The new global trade environment has significantly increased supply chain challenges, notably the arbitrary nature of the implementation of US tariffs.

<div class="phx-topic">This commentary is not specifically about tariffs, or about capacity shortages or surpluses or what to expect if your shipment happens to be transferred to a Chinese vessel or service — whatever that means today. Instead, it considers a related question: How do supply chain practitioners balance demand and supply planning in the current environment of uncertainty? To start, let’s assume you are a medium-size importer into the US from any Asian country subject to tariffs nominally above 20%. At this stage, you have called on the more recent lessons from the first term of Donald Trump and from the COVID-19 pandemic. These will include, but are not limited to, some form of cost-sharing of the increase, somewhere between you absorbing it all to the supplier wearing the whole lot. If you are buying in US dollars, then your supplier is already suffering and will have less room to maneuver. To counter this, a temporary option could be to switch to buying in your supplier’s local currency. This will have some appeal to your supplier as they are possibly overweight in the dollar and have actual costs in local currency. A lot will depend on your view of the trajectory of the dollar. However, two notes of caution: You will still have transaction costs when converting from the US dollar to the local currency, and depending on the country you source from, you may face capital controls if you need to get money back. Furthermore, changing back and forth in currencies has administrative risks with potential payment delays and errors. No doubt there will be a suggestion of suppliers providing lower-than-correct value invoices and some form of offline reconciliation. But doing the right thing in the face of malevolence has its longer-term reward. And besides, the penalties do not merit the risk. <h3>‘Roulette game’ </h3>You will have reduced your destination-side inventory to the degree of ensuring safety stocks. If you managed to get ahead of the tariff increases, you will be sitting on volume that requires warehousing. But as you have avoided tariffs to some degree, this will maintain your competitiveness — despite the increased warehousing and inventory working capital cost — assuming your competitors source from outside the US However, the new environment has significantly increased challenges. First, the rate at which tariff levels are changing makes supply planning a roulette game. This is primarily due to the arbitrary nature of their implementation, unlike previous changes that gave some degree of leeway for orders already in process and/or on the water. Equally challenging is the rollercoaster nature of the degree of tariff moves both up and down. Finally, the tactical response <a href="https://www.joc.com/article/scaled-back-ustr-port-tariff-to-hit-chinese-carriers-hardest-5987549">to avoid Chinese-built, -owned, and -operated ships</a> will be a nightmare for all logisticians. This is particularly important because carrier and vessel choice is largely transactional at an operational level based on guidance from sourcing, so the likelihood of an error costing thousands is high. Where does that leave beneficial cargo owners (BCOs) in deciding which tactics to adopt? Frankly, for the foreseeable future, you will need to choose your poison. The somewhat binary options of manufacturing and storing at origin have appeal, particularly if the <a href="https://www.joc.com/article/air-cargo-volumes-fall-on-trans-pacific-as-us-de-minimis-changes-loom-5993599">removal of de minimis</a> has a projected impact of freeing up air freight space, allowing cheaper (but not cheap) delivery for urgent orders. Alternatively, having the right stocks in place at the right time will do much for customer relations and, intuitively, result in less likelihood of discounting. The downside will be increased costs that will depend on the cost of the tariff versus your sale price. This will mean you either absorb the increase, thus reducing margins and profitability, or try to pass it on to consumers. The final kicker to this issue is consumer demand. With quite consistent indicators from many sources — Goldman Sachs, the International Monetary Fund, the University of Michigan and others— indicating at best a slowdown in all economies, the likelihood of stagflation emerging in the US, or at best/worst the return of inflation, is actually your greatest risk. Because if consumers truly defer consumption expecting lower prices through price reduction and/or discounting to stimulate demand (stagflation), or cannot afford to spend or increase credit card debt (inflation), then these two factors will cause greater headaches than your deliberations on supply planning. John McCauley, formerly a long-standing vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at <a href="mailto:john-mccauley1@outlook.com">john-mccauley1@outlook.com</a>.</div>

This commentary is not specifically about tariffs, or about capacity shortages or surpluses or what to expect if your shipment happens to be transferred to a Chinese vessel or service — whatever that means today. Instead, it considers a related question: How do supply chain practitioners balance demand and supply planning in the current environment of uncertainty? To start, let’s assume you are a medium-size importer into the US from any Asian country subject to tariffs nominally above 20%. At this stage, you have called on the more recent lessons from the first term of Donald Trump and from the COVID-19 pandemic. These will include, but are not limited to, some form of cost-sharing of the increase, somewhere between you absorbing it all to the supplier wearing the whole lot. If you are buying in US dollars, then your supplier is already suffering and will have less room to maneuver. To counter this, a temporary option could be to switch to buying in your supplier’s local currency. This will have some appeal to your supplier as they are possibly overweight in the dollar and have actual costs in local currency. A lot will depend on your view of the trajectory of the dollar. However, two notes of caution: You will still have transaction costs when converting from the US dollar to the local currency, and depending on the country you source from, you may face capital controls if you need to get money back. Furthermore, changing back and forth in currencies has administrative risks with potential payment delays and errors. No doubt there will be a suggestion of suppliers providing lower-than-correct value invoices and some form of offline reconciliation. But doing the right thing in the face of malevolence has its longer-term reward. And besides, the penalties do not merit the risk. ‘Roulette game’ You will have reduced your destination-side inventory to the degree of ensuring safety stocks. If you managed to get ahead of the tariff increases, you will be sitting on volume that requires warehousing. But as you have avoided tariffs to some degree, this will maintain your competitiveness — despite the increased warehousing and inventory working capital cost — assuming your competitors source from outside the US However, the new environment has significantly increased challenges. First, the rate at which tariff levels are changing makes supply planning a roulette game. This is primarily due to the arbitrary nature of their implementation, unlike previous changes that gave some degree of leeway for orders already in process and/or on the water. Equally challenging is the rollercoaster nature of the degree of tariff moves both up and down. Finally, the tactical response to avoid Chinese-built, -owned, and -operated ships will be a nightmare for all logisticians. This is particularly important because carrier and vessel choice is largely transactional at an operational level based on guidance from sourcing, so the likelihood of an error costing thousands is high. Where does that leave beneficial cargo owners (BCOs) in deciding which tactics to adopt? Frankly, for the foreseeable future, you will need to choose your poison. The somewhat binary options of manufacturing and storing at origin have appeal, particularly if the removal of de minimis has a projected impact of freeing up air freight space, allowing cheaper (but not cheap) delivery for urgent orders. Alternatively, having the right stocks in place at the right time will do much for customer relations and, intuitively, result in less likelihood of discounting. The downside will be increased costs that will depend on the cost of the tariff versus your sale price. This will mean you either absorb the increase, thus reducing margins and profitability, or try to pass it on to consumers. The final kicker to this issue is consumer demand. With quite consistent indicators from many sources — Goldman Sachs, the International Monetary Fund, the University of Michigan and others— indicating at best a slowdown in all economies, the likelihood of stagflation emerging in the US, or at best/worst the return of inflation, is actually your greatest risk. Because if consumers truly defer consumption expecting lower prices through price reduction and/or discounting to stimulate demand (stagflation), or cannot afford to spend or increase credit card debt (inflation), then these two factors will cause greater headaches than your deliberations on supply planning. John McCauley, formerly a long-standing vice president of transportation and logistics at Cargill, now consults for shippers. Contact him at john-mccauley1@outlook.com .

Navigating the current supply chain is a matter of choosing your poison

Notes: Z-Scores of train speeds, trains holding, and idling railcars. Positive values reflect greater fluidity relative to historical averages. Each railroad is benchmarked against its own past performance.

2023

2023: {CSX_service_score_2023.formatNumber('#.##')}

2024

2024: {CSX_service_score_2024.formatNumber('#.##')}

2025

2025: {CSX_service_score_2025.formatNumber('#.##')}

Weekly CSX intermodal service performance (STB)

<div class="phx-topic abstract-wrapper">Ocean carrier profits this year are expected to be less than half of what they were in 2024 amid an uncertain macroeconomic outlook. </div>

Ocean carrier profits this year are expected to be less than half of what they were in 2024 amid an uncertain macroeconomic outlook.

<div class="phx-topic">The container shipping industry is on track for a profitable year, although not as strong as 2024, as higher operating expenses dampen rate momentum driven by tariff uncertainty, according to analysts. Among nine publicly traded ocean carriers, revenue for 2025 is expected to reach $138.2 billion, according to Capital IQ Estimates, down from $155.5 billion reported for 2024. Capital IQ is a sister company of the Journal of Commerce within S&amp;P Global. The main driver for last year’s results were steadily strengthening freight rates spurred by resilient consumer and industrial demand, with the Platts Global Container Index rising from $2,300 per standard container to almost $5,000 by the end of 2024. And while rates remain elevated, particularly in the trans-Pacific, the outlook for earnings is dimmer. Industry-wide net income is expected to be $11.6 billion in 2025, compared with $28.6 billion in 2024, data from Capital IQ Estimates shows. After most carriers reported first-quarter earnings for 2025, analysts trimmed collective earnings forecasts for ocean carriers by $600 million since the beginning of April. Even with the recent tariff turmoil, most ocean carriers saw few, if any, market catalysts to create a repeat of 2024. Other industry watchers also see a tougher comparison for ocean carriers this year. Alphaliner noted the average first-quarter operating margin for ocean carriers fell to 18.1%, the lowest in four quarters. Maritime consultancy Drewry sees operating profit for the container shipping industry falling to $20 billion this year, down from about $50 billion in 2024. Ocean carriers are flagging higher operating expenses in 2025 as ships get delayed and the costs of container repositioning become more burdensome. Hapag-Lloyd highlighted a 9% increase in handling and haulage costs for the first quarter, primarily because of having to secure storage for empty containers and higher drayage expenses for door moves. <h3>Muted rate outlook </h3>While higher freight rates can offset those increases, carrier chief executives remain cautious on how far the current rally will go. Maersk Chief Executive Vincent Clerc offered a forecast of global container demand ranging anywhere from a decline of 1% to growth of 4% during the company’s second-quarter earnings call on May 8, down from a forecast of 4% in February. Clerc said President Donald Trump’s trade policies are forcing more Maersk customers to reconsider where they source goods. While some shippers highly dependent on China are looking to frontload goods, others are drawing inventory in North America or looking at how to exit China. “The increased macroeconomic and geopolitical uncertainties since we shared our guidance in February inevitably affects our outlook for the rest of the year, especially on the back of the escalation we saw of the US-China trade tensions as well as the unresolved questions around the other tariffs currently under the 90-day reprieve,” Clerc said. Even though container freight bookings out of China saw a resurgence following the 90-day tariff reprieve, Hapag-Lloyd Chief Executive Rolf Habben Jansen said during a May 14 earnings call he expects only a “little bit of a surge” over the next two or three months. He said Hapag-Lloyd is maintaining its current 2025 outlook based on the “assumption that we expect to see freight rates declining based on the trends that we have seen in the market over the last couple of months.” “I think [the] demand trend for 2025 at the moment is pretty uncertain,” Habben Jansen said. “We see new developments every day. I think the only thing we know for sure is that the first quarter was pretty good.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The container shipping industry is on track for a profitable year, although not as strong as 2024, as higher operating expenses dampen rate momentum driven by tariff uncertainty, according to analysts. Among nine publicly traded ocean carriers, revenue for 2025 is expected to reach $138.2 billion, according to Capital IQ Estimates, down from $155.5 billion reported for 2024. Capital IQ is a sister company of the Journal of Commerce within S&P Global. The main driver for last year’s results were steadily strengthening freight rates spurred by resilient consumer and industrial demand, with the Platts Global Container Index rising from $2,300 per standard container to almost $5,000 by the end of 2024. And while rates remain elevated, particularly in the trans-Pacific, the outlook for earnings is dimmer. Industry-wide net income is expected to be $11.6 billion in 2025, compared with $28.6 billion in 2024, data from Capital IQ Estimates shows. After most carriers reported first-quarter earnings for 2025, analysts trimmed collective earnings forecasts for ocean carriers by $600 million since the beginning of April. Even with the recent tariff turmoil, most ocean carriers saw few, if any, market catalysts to create a repeat of 2024. Other industry watchers also see a tougher comparison for ocean carriers this year. Alphaliner noted the average first-quarter operating margin for ocean carriers fell to 18.1%, the lowest in four quarters. Maritime consultancy Drewry sees operating profit for the container shipping industry falling to $20 billion this year, down from about $50 billion in 2024. Ocean carriers are flagging higher operating expenses in 2025 as ships get delayed and the costs of container repositioning become more burdensome. Hapag-Lloyd highlighted a 9% increase in handling and haulage costs for the first quarter, primarily because of having to secure storage for empty containers and higher drayage expenses for door moves. Muted rate outlook While higher freight rates can offset those increases, carrier chief executives remain cautious on how far the current rally will go. Maersk Chief Executive Vincent Clerc offered a forecast of global container demand ranging anywhere from a decline of 1% to growth of 4% during the company’s second-quarter earnings call on May 8, down from a forecast of 4% in February. Clerc said President Donald Trump’s trade policies are forcing more Maersk customers to reconsider where they source goods. While some shippers highly dependent on China are looking to frontload goods, others are drawing inventory in North America or looking at how to exit China. “The increased macroeconomic and geopolitical uncertainties since we shared our guidance in February inevitably affects our outlook for the rest of the year, especially on the back of the escalation we saw of the US-China trade tensions as well as the unresolved questions around the other tariffs currently under the 90-day reprieve,” Clerc said. Even though container freight bookings out of China saw a resurgence following the 90-day tariff reprieve, Hapag-Lloyd Chief Executive Rolf Habben Jansen said during a May 14 earnings call he expects only a “little bit of a surge” over the next two or three months. He said Hapag-Lloyd is maintaining its current 2025 outlook based on the “assumption that we expect to see freight rates declining based on the trends that we have seen in the market over the last couple of months.” “I think [the] demand trend for 2025 at the moment is pretty uncertain,” Habben Jansen said. “We see new developments every day. I think the only thing we know for sure is that the first quarter was pretty good.” Contact Michael Angell at michael.angell@spglobal.com .

Global uncertainty to erode ocean carrier profits in 2025

<div class="phx-topic abstract-wrapper">That the port is the largest transshipment hub makes it convenient for carriers to transship cargo as they redeploy vessels from European and other long-haul trades to US-focused services. </div>

That the port is the largest transshipment hub makes it convenient for carriers to transship cargo as they redeploy vessels from European and other long-haul trades to US-focused services.

<div class="phx-topic">Singapore has joined Shanghai, the world’s second-busiest and busiest ports, respectively, in facing congestion driven by a rush of exports to the US during a 90-day tariff cooldown, according to forwarder and carrier sources. Operations in Singapore have been “heavily disrupted,” with transshipment cargo delayed by up to two weeks, forwarder Kuehne + Nagel said in an update Wednesday on its SeaExplorer visibility platform. According to a Monday update from container carrier Hapag-Lloyd, ships are waiting up to three days to berth at Singapore’s primary terminals due to vessel bunching and congestion. That Singapore is the world’s largest transshipment hub makes it convenient for carriers to transship cargo as they redeploy vessels from European and other long-haul trades to US-focused services. Congestion at other Asian ports is also contributing to a backlog of ships in Singapore. “PSA Singapore has seen a high concentration of container vessel arrivals in recent weeks, attributable to several factors, including some service reconfigurations by shipping lines in response to various business changes and global issues to optimize their network operations, as well as ripple effects from congestion and delays at other locations,” a PSA spokesperson told the Journal of Commerce. The spokesperson said the port’s spare capacity and resources are being utilized to mitigate the impact of the rise in vessel arrivals. <h3>Shanghai congestion worsens</h3>The situation has also deteriorated in Shanghai, with carriers reporting wait times of up to five days, compared with about three days last week, according to K+N. The largest global forwarder said shippers are diverting cargo away from Shanghai to Ningbo to avoid delays, slowing operations in Ningbo. Similarly, congestion has worsened at Port Klang, Malaysia’s gateway terminal complex, with “heavily disrupted operations” and vessel wait times of up to three days, K+N said in its SeaExplorer update. Tan Hua Joo, co-founder of shipping data platform Linerlytica, told the Journal of Commerce, “Both Singapore and Port Klang are experiencing longer berthing delays due to heavy vessel traffic and bunching of arrivals due to delays at upstream ports.” And in South Asia, the ports of Colombo, Sri Lanka; Mundra, India; and Chittagong, Bangladesh, “are also seeing increased waiting times at the moment,” Hua Joo said. Vessel schedules from Ocean Network Express (ONE) this week provide an example of how the additional pressures in Singapore and Port Klang are impacting network fluidity. ONE’s 3,000-TEU Wan Hai 331, deployed on its Japan-Straits-Malaysia service, was four days late departing Hong Kong last Friday, but berthing delays in Singapore and Port Klang have increased these delays to eight days, with the ship scheduled to arrive in Singapore on June 3. Schedules for June and July indicate ONE has lengthened the estimated time of arrival from four days to up to seven days from Hong Kong to Singapore for a raft of vessels operating on intra-Asia and Europe-Mediterranean services to account for berthing delays in Singapore. Other ports in Asia, including Tianjin, Qingdao, Shenzhen, Nansha and Hong Kong in China; Busan, South Korea; Yokohama, Japan; Ho Chi Minh, Vietnam; and Manila, Philippines, are also dealing with declining port performance, K+N said. The number of vessels waiting at key ports in Asia has been trending upward again in the last two weeks after plunging from a high at the start of May, according to Portcast’s ship tracking index. There were 62 ships waiting to berth at Shanghai on Wednesday, approximately double the number in mid-May. The vessel backlog outside Singapore hit 55 on May 14, before plunging as low as 23 on May 21, Portcast data shows. <h3>Attention turns to US West Coast</h3>During Evergreen Marine’s annual general meeting Thursday, chairman Chang Yen-yi said port congestion would spread to US West Coast ports next month as vessels from Asia, including extra capacity that carriers are deploying during the current tariff pause, start arriving at Los Angeles and Long Beach. Gene Seroka, executive director of the Port of Los Angeles, is confident that the nation’s busiest US container gateway is ready to handle what he expects to be a relatively minor surge in volumes compared with previous sudden demand increases, such as during the COVID-19 pandemic. “You won’t see a deluge of freight here at the Port of Los Angeles,” Seroka said in a May 18 briefing. “We will not be caught off guard.” Similar to during the pandemic, the sharpest limits to capacity during an import surge will be outside the truck gates, not at the marine terminals. As containers exit the ports, the influx of international intermodal shipments will test rail car supply, and importers and consignees could face less availability of warehousing and chassis. Contact Keith Wallis at <a href="keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Singapore has joined Shanghai, the world’s second-busiest and busiest ports, respectively, in facing congestion driven by a rush of exports to the US during a 90-day tariff cooldown, according to forwarder and carrier sources. Operations in Singapore have been “heavily disrupted,” with transshipment cargo delayed by up to two weeks, forwarder Kuehne + Nagel said in an update Wednesday on its SeaExplorer visibility platform. According to a Monday update from container carrier Hapag-Lloyd, ships are waiting up to three days to berth at Singapore’s primary terminals due to vessel bunching and congestion. That Singapore is the world’s largest transshipment hub makes it convenient for carriers to transship cargo as they redeploy vessels from European and other long-haul trades to US-focused services. Congestion at other Asian ports is also contributing to a backlog of ships in Singapore. “PSA Singapore has seen a high concentration of container vessel arrivals in recent weeks, attributable to several factors, including some service reconfigurations by shipping lines in response to various business changes and global issues to optimize their network operations, as well as ripple effects from congestion and delays at other locations,” a PSA spokesperson told the Journal of Commerce. The spokesperson said the port’s spare capacity and resources are being utilized to mitigate the impact of the rise in vessel arrivals. Shanghai congestion worsens The situation has also deteriorated in Shanghai, with carriers reporting wait times of up to five days, compared with about three days last week, according to K+N. The largest global forwarder said shippers are diverting cargo away from Shanghai to Ningbo to avoid delays, slowing operations in Ningbo. Similarly, congestion has worsened at Port Klang, Malaysia’s gateway terminal complex, with “heavily disrupted operations” and vessel wait times of up to three days, K+N said in its SeaExplorer update. Tan Hua Joo, co-founder of shipping data platform Linerlytica, told the Journal of Commerce, “Both Singapore and Port Klang are experiencing longer berthing delays due to heavy vessel traffic and bunching of arrivals due to delays at upstream ports.” And in South Asia, the ports of Colombo, Sri Lanka; Mundra, India; and Chittagong, Bangladesh, “are also seeing increased waiting times at the moment,” Hua Joo said. Vessel schedules from Ocean Network Express (ONE) this week provide an example of how the additional pressures in Singapore and Port Klang are impacting network fluidity. ONE’s 3,000-TEU Wan Hai 331, deployed on its Japan-Straits-Malaysia service, was four days late departing Hong Kong last Friday, but berthing delays in Singapore and Port Klang have increased these delays to eight days, with the ship scheduled to arrive in Singapore on June 3. Schedules for June and July indicate ONE has lengthened the estimated time of arrival from four days to up to seven days from Hong Kong to Singapore for a raft of vessels operating on intra-Asia and Europe-Mediterranean services to account for berthing delays in Singapore. Other ports in Asia, including Tianjin, Qingdao, Shenzhen, Nansha and Hong Kong in China; Busan, South Korea; Yokohama, Japan; Ho Chi Minh, Vietnam; and Manila, Philippines, are also dealing with declining port performance, K+N said. The number of vessels waiting at key ports in Asia has been trending upward again in the last two weeks after plunging from a high at the start of May, according to Portcast’s ship tracking index. There were 62 ships waiting to berth at Shanghai on Wednesday, approximately double the number in mid-May. The vessel backlog outside Singapore hit 55 on May 14, before plunging as low as 23 on May 21, Portcast data shows. Attention turns to US West Coast During Evergreen Marine’s annual general meeting Thursday, chairman Chang Yen-yi said port congestion would spread to US West Coast ports next month as vessels from Asia, including extra capacity that carriers are deploying during the current tariff pause, start arriving at Los Angeles and Long Beach. Gene Seroka, executive director of the Port of Los Angeles, is confident that the nation’s busiest US container gateway is ready to handle what he expects to be a relatively minor surge in volumes compared with previous sudden demand increases, such as during the COVID-19 pandemic. “You won’t see a deluge of freight here at the Port of Los Angeles,” Seroka said in a May 18 briefing. “We will not be caught off guard.” Similar to during the pandemic, the sharpest limits to capacity during an import surge will be outside the truck gates, not at the marine terminals. As containers exit the ports, the influx of international intermodal shipments will test rail car supply, and importers and consignees could face less availability of warehousing and chassis. Contact Keith Wallis at keithwallis@hotmail.com .

North American ports

Marine terminals

International ports

Asia port disruption wave reaches Singapore

<div class="phx-topic abstract-wrapper">To achieve the promised 95% on-time performance, J.B. Hunt will require a strong collaboration with BNSF Railway and Grupo México Transportes to navigate challenges in cross-border rail.</div>

To achieve the promised 95% on-time performance, J.B. Hunt will require a strong collaboration with BNSF Railway and Grupo México Transportes to navigate challenges in cross-border rail.

<div class="phx-topic">J.B. Hunt Transport Services, BNSF Railway and Mexican rail operator Grupo Mexico Transportes (GMXT, parent company of Ferromex) are launching a cross-border intermodal service pledging at least 95% on-time performance, underscoring rising demand for truck-like dependable intermodal service from Mexico to the US. The Quantum de Mexico service was launched Friday, starting with the formal process of reaching out to current and potential shippers, gauging interest and their delivery standards. It’s a process that could take a few months to complete, the company said. The 95% on-time guarantee will be measured differently based on criteria established with each shipper, but in general, J.B. Hunt will deliver cargo within a delivery window, much like a window a homeowner might see waiting for a plumber or HVAC technician. “Each standard operating procedure for Quantum de Mexico will be tailored to the customer,” said Spencer Frazier, executive vice president of sales and marketing at J.B. Hunt. “We will design the service based on customer needs at point of delivery.” The Quantum de Mexico service — based on the US Quantum service launched by J.B. Hunt and BNSF in 2023 — will connect Guadalajara, Mexico City, and Monterrey to Chicago, Dallas, and parts of the US West Coast and East Coast which have yet to be named. Quantum de Mexico will fuel rising competition for cross-border freight, both in intermodal and trucking markets. On the rails, Quantum will compete with Union Pacific Railroad’s (UP’s) Falcon Premium and Canadian Pacific Kansas City’s (CPKC’s) Mexico Midwest Express. J.B. Hunt’s direct competitors are Hub Group and Schneider National. Hub Group has partnered with UP’s Falcon Premium and launched a <a href="https://www.joc.com/article/hub-group-boosts-cross-border-business-in-jv-with-mexican-dray-carrier-5745355">joint venture</a> with Mexican drayage provider Easo. Schneider is the primary customer of CPKC’s cross-border services. The intermodal providers all compete with long-established truckload options. Trucking handles most of the cross-border freight, with intermodal rail accounting for about 10% to 15% of dry freight business, according to the US Bureau of Transportation Statistics. The total number of trucks entering the US from Mexico increased 3.5% in 2024, rising to 7.6 million. Just eight border crossings handled 92.8% of those trucks. Those border crossings are a narrow funnel that is getting tighter as cross-border volumes rise. <h3>Where it gets complicated </h3>Shippers are looking for new solutions and ways to avoid delays and speed cross-border shipments, and time-sensitive intermodal, once a contradiction in terms, is now a real option, J.B. Hunt, BNSF and GMXT told the Journal of Commerce. “In Mexico, potential issues with over-the-road capacity and lack of infrastructure investment are driving our customer to say, ‘Hey, we need something different,” Frazier said in an interview. “It’s not just consistent capacity; it’s the high level of service.” The need for speed in replenishment and to avoid penalties for missing delivery deadlines continues to drive changes in supply chains, creating opportunities for services such as Quantum, which will be up to one day faster than regular intermodal service. In the US, Quantum service is more expensive than regular intermodal but not as expensive as expedited trains. The nature of the US-Mexico border makes delivering 95% reliability significantly tougher than hitting such a target on US domestic moves. For example, Mexican regulations allow an electronic submission of customs documents, known as pedimentos, but also require a physical copy to be delivered. That requires a runner to hand over documents for a stamp before a container can be loaded or rejected. Additionally, customs offices are open 24 hours in Monterrey, but others in less populated cities close outside of standard business hours. Quantum de Mexico will set up processes with each customer to clear customs hurdles before freight is loaded, Frazier said. “We will have specific operational spots at GMXT terminals [in Mexico] for Quantum shipments at a schedule dictated by the customer,” he said. “We will have someone from GMXT in Fort Worth, Texas, for 24/7 oversight of Quantum shipments.” J.B. Hunt’s partnership with BNSF includes a co-located office in Fort Worth, Texas, where employees of both companies monitor Quantum loads 24 hours a day. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. Senior Editor William B. Cassidy contributed to this report. </div>

J.B. Hunt Transport Services, BNSF Railway and Mexican rail operator Grupo Mexico Transportes (GMXT, parent company of Ferromex) are launching a cross-border intermodal service pledging at least 95% on-time performance, underscoring rising demand for truck-like dependable intermodal service from Mexico to the US. The Quantum de Mexico service was launched Friday, starting with the formal process of reaching out to current and potential shippers, gauging interest and their delivery standards. It’s a process that could take a few months to complete, the company said. The 95% on-time guarantee will be measured differently based on criteria established with each shipper, but in general, J.B. Hunt will deliver cargo within a delivery window, much like a window a homeowner might see waiting for a plumber or HVAC technician. “Each standard operating procedure for Quantum de Mexico will be tailored to the customer,” said Spencer Frazier, executive vice president of sales and marketing at J.B. Hunt. “We will design the service based on customer needs at point of delivery.” The Quantum de Mexico service — based on the US Quantum service launched by J.B. Hunt and BNSF in 2023 — will connect Guadalajara, Mexico City, and Monterrey to Chicago, Dallas, and parts of the US West Coast and East Coast which have yet to be named. Quantum de Mexico will fuel rising competition for cross-border freight, both in intermodal and trucking markets. On the rails, Quantum will compete with Union Pacific Railroad’s (UP’s) Falcon Premium and Canadian Pacific Kansas City’s (CPKC’s) Mexico Midwest Express. J.B. Hunt’s direct competitors are Hub Group and Schneider National. Hub Group has partnered with UP’s Falcon Premium and launched a joint venture with Mexican drayage provider Easo. Schneider is the primary customer of CPKC’s cross-border services. The intermodal providers all compete with long-established truckload options. Trucking handles most of the cross-border freight, with intermodal rail accounting for about 10% to 15% of dry freight business, according to the US Bureau of Transportation Statistics. The total number of trucks entering the US from Mexico increased 3.5% in 2024, rising to 7.6 million. Just eight border crossings handled 92.8% of those trucks. Those border crossings are a narrow funnel that is getting tighter as cross-border volumes rise. Where it gets complicated Shippers are looking for new solutions and ways to avoid delays and speed cross-border shipments, and time-sensitive intermodal, once a contradiction in terms, is now a real option, J.B. Hunt, BNSF and GMXT told the Journal of Commerce. “In Mexico, potential issues with over-the-road capacity and lack of infrastructure investment are driving our customer to say, ‘Hey, we need something different,” Frazier said in an interview. “It’s not just consistent capacity; it’s the high level of service.” The need for speed in replenishment and to avoid penalties for missing delivery deadlines continues to drive changes in supply chains, creating opportunities for services such as Quantum, which will be up to one day faster than regular intermodal service. In the US, Quantum service is more expensive than regular intermodal but not as expensive as expedited trains. The nature of the US-Mexico border makes delivering 95% reliability significantly tougher than hitting such a target on US domestic moves. For example, Mexican regulations allow an electronic submission of customs documents, known as pedimentos, but also require a physical copy to be delivered. That requires a runner to hand over documents for a stamp before a container can be loaded or rejected. Additionally, customs offices are open 24 hours in Monterrey, but others in less populated cities close outside of standard business hours. Quantum de Mexico will set up processes with each customer to clear customs hurdles before freight is loaded, Frazier said. “We will have specific operational spots at GMXT terminals [in Mexico] for Quantum shipments at a schedule dictated by the customer,” he said. “We will have someone from GMXT in Fort Worth, Texas, for 24/7 oversight of Quantum shipments.” J.B. Hunt’s partnership with BNSF includes a co-located office in Fort Worth, Texas, where employees of both companies monitor Quantum loads 24 hours a day. Contact Ari Ashe at ari.ashe@spglobal.com . Senior Editor William B. Cassidy contributed to this report.

J.B. Hunt launching Quantum de Mexico for time-sensitive cross-border freight

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

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Shippers save money, time with automated transportation bidding tools

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

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<div class="phx-topic abstract-wrapper">The US Court of International Trade on Wednesday stated that President Donald Trump’s tariffs exceed his authority. </div>

The US Court of International Trade on Wednesday stated that President Donald Trump’s tariffs exceed his authority.

<div class="phx-topic">A federal trade court’s striking down of President Donald Trump’s series of tariffs against most of its trading partners resets shipping expectations after months of whiplash but adds yet more uncertainty for importers. The US Court of International Trade on Wednesday blocked Trump’s use of emergency powers to impose a 10% tax across most countries and the 145% tariff hanging over US imports from China amid a 90-day reprieve. The decision will almost certainly be appealed, adding uncertainty to importers. “The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the court stated. The decision, if upheld, would draw a close to more than six months of uncertainty on the future of US tariffs and retaliatory measures against US exporters. The Trump administration may find other ways to impose leverage in trade negotiations. Anticipation of Trump’s second term and his reelection spurred importers to frontload cargo for months, before pulling back on orders after he announced a 145% tariff on April 9. The US and China agreed on May 12 to a 90-day cooling off period in which reciprocal tariffs on Chinese goods were reduced to 30%. Before the decision Wednesday, container lines warned that container space from Asia to the US would be tight through June as they worked to restore capacity removed following the plunge in bookings out of China. The peak season ahead of the winter holidays generally begins in June and runs through August. This is a developing story. </div>

A federal trade court’s striking down of President Donald Trump’s series of tariffs against most of its trading partners resets shipping expectations after months of whiplash but adds yet more uncertainty for importers. The US Court of International Trade on Wednesday blocked Trump’s use of emergency powers to impose a 10% tax across most countries and the 145% tariff hanging over US imports from China amid a 90-day reprieve. The decision will almost certainly be appealed, adding uncertainty to importers. “The Worldwide and Retaliatory Tariff Orders exceed any authority granted to the President by IEEPA to regulate importation by means of tariffs,” the court stated. The decision, if upheld, would draw a close to more than six months of uncertainty on the future of US tariffs and retaliatory measures against US exporters. The Trump administration may find other ways to impose leverage in trade negotiations. Anticipation of Trump’s second term and his reelection spurred importers to frontload cargo for months, before pulling back on orders after he announced a 145% tariff on April 9. The US and China agreed on May 12 to a 90-day cooling off period in which reciprocal tariffs on Chinese goods were reduced to 30%. Before the decision Wednesday, container lines warned that container space from Asia to the US would be tight through June as they worked to restore capacity removed following the plunge in bookings out of China. The peak season ahead of the winter holidays generally begins in June and runs through August. This is a developing story.

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Trans-Atlantic

Federal court ruling blocking tariffs resets shipping outlook

<div class="phx-topic abstract-wrapper">Within a span of roughly 24 hours, one court decision blocked the US tariffs and a separate ruling restored the tariffs through June 9, if not longer. </div>

Within a span of roughly 24 hours, one court decision blocked the US tariffs and a separate ruling restored the tariffs through June 9, if not longer.

<div class="phx-topic">US importers ended Thursday with little clarity on the permanence of sweeping tariffs after an appeals court allowed President Donald Trump’s tax to go forward for a least a week-and-a-half. The US Court of Appeals for the Federal Circuit’s decision Thursday to pause the International Trade Court’s <a href="https://www.joc.com/article/federal-court-ruling-blocking-tariffs-resets-shipping-outlook-6013402">rejection of the tariffs Wednesday</a>, citing a lack of constitutionality, comes in the early days of peak season and with inbound capacity from Asia generally booked through next month.The appeals court laid out a briefing schedule through June 9 but did not detail its reasoning for the pause.The Trump administration has said it is also looking at other ways to maintain tariffs, suggesting importers won’t have clarity on the permanence of tariffs in the foreseeable future. The rulings don’t apply to US tariffs of aluminum and steel, which put downward pressure on US breakbulk demand.Amid a flurry of mixed signals, smaller shippers may be gauging whether to rush or slow shipments, logistic consultant Kevin Parkerson told the Journal of Commerce. But, he said, the largest retailers are keeping their strategies consistent with how they’ve operated since tariffs were announced in April: maintain imports to keep goods on shelves, whatever the tariff rate. US importers had little time to change their booking plans given that the two rulings occurred within roughly 24 hours of each other. Before this week, container lines warned that container space from Asia to the US <a href="https://www.joc.com/article/ocean-carriers-bring-in-more-trans-pacific-container-services-amid-rate-surge-6012725">would be tight through June</a> as they worked to restore capacity removed following the plunge in bookings out of China. The peak season ahead of the winter holidays generally begins in June and runs through August, though it has moved to other windows in recent years due to various external dynamics. US retail imports are <a href="https://www.joc.com/article/us-retailers-project-first-year-over-year-import-cut-in-19-months-as-tariffs-bite-6001817">forecast to end this month with the first decline</a> in more than a year and a half, according to Global Port Tracker (GPT) published in early May by Hackett Associates on behalf of the National Retail Federation. US imports will end May down 13% May 2024, and will mark the first year-over-year decline in 19 months. </div>

US importers ended Thursday with little clarity on the permanence of sweeping tariffs after an appeals court allowed President Donald Trump’s tax to go forward for a least a week-and-a-half. The US Court of Appeals for the Federal Circuit’s decision Thursday to pause the International Trade Court’s rejection of the tariffs Wednesday , citing a lack of constitutionality, comes in the early days of peak season and with inbound capacity from Asia generally booked through next month. The appeals court laid out a briefing schedule through June 9 but did not detail its reasoning for the pause. The Trump administration has said it is also looking at other ways to maintain tariffs, suggesting importers won’t have clarity on the permanence of tariffs in the foreseeable future. The rulings don’t apply to US tariffs of aluminum and steel, which put downward pressure on US breakbulk demand. Amid a flurry of mixed signals, smaller shippers may be gauging whether to rush or slow shipments, logistic consultant Kevin Parkerson told the Journal of Commerce. But, he said, the largest retailers are keeping their strategies consistent with how they’ve operated since tariffs were announced in April: maintain imports to keep goods on shelves, whatever the tariff rate. US importers had little time to change their booking plans given that the two rulings occurred within roughly 24 hours of each other. Before this week, container lines warned that container space from Asia to the US would be tight through June as they worked to restore capacity removed following the plunge in bookings out of China. The peak season ahead of the winter holidays generally begins in June and runs through August, though it has moved to other windows in recent years due to various external dynamics. US retail imports are forecast to end this month with the first decline in more than a year and a half, according to Global Port Tracker (GPT) published in early May by Hackett Associates on behalf of the National Retail Federation. US imports will end May down 13% May 2024, and will mark the first year-over-year decline in 19 months.

Appeals court temporarily restores US tariffs

<div class="phx-topic abstract-wrapper">The largest asset-based truckload carriers are churning their way through a muddy market bottom extended by economic uncertainty, searching for signs of rising demand. </div>

The largest asset-based truckload carriers are churning their way through a muddy market bottom extended by economic uncertainty, searching for signs of rising demand.

<div class="phx-topic">The 25 largest US truckload carriers cut their way through the second year of a cyclical freight downturn in 2024, with soft freight demand and low rates pushing their combined revenue down 3.9% year over year to $37.9 billion, according to the SJ Consulting Group/Journal of Commerce Top 25 US Truckload Carrier rankings. Excess capacity made it difficult for truckload carriers to gain traction in the market, except through acquisitions. The largest truckload carriers reduced their capacity throughout the year, parking or selling underutilized trucks and dropping the Journal of Commerce Truckload Capacity Index (TCI) to its <a href="https://www.joc.com/article/large-truckload-carriers-make-capacity-cuts-but-trucks-reenter-the-market-6004177">lowest level in a decade</a>. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e1610a4f-b93f-45aa-ae0c-d560b848ec49"></dynamic-object></div>Last year, revenue decreased at 17 of the Top 25 truckload carriers, an improvement compared with the 20 carriers in the rankings that <a href="https://www.joc.com/article/journal-of-commerce-rankings-top-40-truckload-carriers-still-weak-after-2023-plunge-5225496">lost revenue in 2023</a>, according to SJ Consulting data. Since 2022, the Top 25 truckload carriers have lost 12.1% of their revenue, which hit $43 billion in that peak year of the COVID-19 pandemic boom. This year isn’t expected to bring much improvement for truckload carriers, large or small. Heading into 2025, truckload executives were optimistic about the prospects for a rebound in demand and pricing. Nearly six months into the year, much of that optimism is gone. “There’s no sustained, steady demand coming this year,” said Jason Miller, the Eli Broad endowed professor of supply chain management at Michigan State University. Surges in US imports did nothing to lift the truckload sector out of the doldrums in 2024, and they’re not likely to do so in 2025, especially when the timing and extent of such surges shifts with the volatile trade policy of the Trump administration. “Temporary spikes are not enough to change the market direction,” Miller told the Journal of Commerce. Yet some believe the direction of the market is heading upward, albeit slowly. The latest RXO Curve forecast from logistics provider RXO noted that contract rates measured by the Cass Contract Rate Index turned positive year over year in the first quarter, rising 1.4%. Spot rates at RXO were up 9.1% year over year in the first quarter. Even so, for spot or contract rates, “a steep ramp upwards is unlikely,” RXO said. <h3>Highs and lows </h3>The Top 25 truckload carriers in the rankings represent a small fraction of the total number of truckload carriers. There were 53,705 long-distance truckload carriers in operation across the US in 2022, according to the latest US Economic Census, a five-year census of businesses in the US and a benchmark for economic activity.The census data, released in April, does not include one-truck owner-operators. Only 248 of the 53,705 carriers in the US Economic Census had more than 250 employees. From 2017 through 2022 — the last two economic censuses — the overall number of truckload providers increased 68.3%. The number of truckload firms with more than 250 employees increased 12.2% with the addition of just 27 carriers in that period. In that same five-year period, the number of firms with five employees or fewer increased by 70.1% to 26,941 companies. That reflects growth during the 2018 trucking boom and then the explosion of new carriers from 2020 through 2022. The Top 25 truckload carriers, all companies with more than $500 million in annual revenue, may be outnumbered by small carriers, but they haul large volumes of freight for large shippers, making them almost a separate industry sector of their own. The largest carriers in the rankings were J.B. Hunt Transport Services, with $4.1 billion in truckload-related revenue; Knight-Swift Transportation Holdings, with $3.5 billion; and Schneider National, with $2.6 billion, according to SJ Consulting Group research. Last year was the second at the top of the rankings for those three companies, yet they each lost revenue compared with 2023. J.B. Hunt’s truckload revenue dropped 5.4%; Knight-Swift’s truckload revenue, excluding US Xpress Enterprises, dropped 4%; and Schneider’s topline fell 3.3%, according to the data behind the rankings. Ryder System climbed from eighth in the rankings to fourth place, increasing its truckload-related revenue 37% year over year. The increase does not represent Ryder’s total revenue, which increased 7% last year, but its truckload-related revenue as defined by SJ Consulting Group. The <a href="https://www.joc.com/article/ryder-acquires-cardinal-logistics-adding-dedicated-trucking-muscle-5244728">acquisition of Cardinal Logistics</a> in 2024 fueled that growth. Multiyear strategic initiatives also are driving Ryder’s growth, Robert E. Sanchez, chairman and CEO, told Wall Street analysts during a first-quarter earnings call in April. “The key driver of expected earnings growth in 2025 is incremental benefits ... related to our contractual lease, dedicated, and supply chain businesses,” Sanchez said. <h3>Ups and downs </h3>In addition to Ryder, the Top 25 carriers that increased revenue last year included Covenant Transportation Group (6.6%), Stevens Transport (5%), Universal Truckload (3.9%) and PS Logistics (1.7%), according to SJ Consulting Group data. An underlying lesson from Ryder is that diversification can be an effective strategy in dealing with a soft freight market and cautious customers. Many of the truckload carriers in the Top 25 rankings are pursuing more dedicated business rather than one-way truckload, or even, in the case of Knight-Swift, breaking into the less-than-truckload (LTL) market. The company that lost the most in terms of revenue was Daseke, a specialized heavy-haul conglomerate owned by TFI International. Daseke’s revenue dropped 17.8% year over year to $1.1 billion, according to SJ Consulting Group, which attributed the decline to lower demand for infrastructure and industrial project work for specialized trucking. However, Daseke retained its position as the 12th largest carrier in the rankings, a sign of how much revenue the overall market and the Top 25 group lost in 2024. The 17 carriers that lost revenue in 2024 saw that revenue drop 9% on average in 2024. Still, the combined revenue of the Top 25 truckload carriers was higher than in any year before 2022. From 2020 through 2022, that combined revenue shot up 38.7% and then dropped 12.1% through 2024. Altogether, nine carriers moved lower in the rankings last year, while six moved higher, and seven retained their rankings. Three new companies joined or rejoined the Top 25: Covenant Transportation Group, Universal Truckload and Anderson Trucking Services. The base level of revenue needed to get into the rankings fell from $722 million in 2023 to $565 million last year, a 21.8% decline. That’s an indicator of the depth of the demand-driven malaise in the truckload market. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.<div class="wrapper-full"><table><colgroup><col width="13.89%"></col><col width="41.12%"></col><col width="15.99%"></col><col width="15.99%"></col><col width="13.01%"></col></colgroup><caption>Journal of Commerce Top 25 US Truckload CarriersAnnual revenue, including fuel surcharges, in millions of US dollars</caption><thead><tr><th>2024 Rank</th><th>Carrier</th><th>2023 Revenue</th><th>2024 Revenue</th><th>YoY Change</th></tr></thead><tbody><tr><td class="align-right">1</td><td>J.B. Hunt Transport Services</td><td class="align-right">$4,332</td><td class="align-right">$4,097</td><td class="align-right">-5.4%</td></tr><tr><td class="align-right">2</td><td>Knight-Swift Transportation Holdings</td><td class="align-right">$3,683</td><td class="align-right">$3,535</td><td class="align-right">-4.0%</td></tr><tr><td class="align-right">3</td><td>Schneider National</td><td class="align-right">$2,640</td><td class="align-right">$2,552</td><td class="align-right">-3.3%</td></tr><tr><td class="align-right">4</td><td>Ryder System</td><td class="align-right">$1,785</td><td class="align-right">$2,446</td><td class="align-right">37.0%</td></tr><tr><td class="align-right">5</td><td>Prime</td><td class="align-right">$2,524</td><td class="align-right">$2,283</td><td class="align-right">-9.5%</td></tr><tr><td class="align-right">6</td><td>Penske Logistics</td><td class="align-right">$2,200</td><td class="align-right">$2,230</td><td class="align-right">1.4%</td></tr><tr><td class="align-right">7</td><td>Werner Enterprises</td><td class="align-right">$2,282</td><td class="align-right">$2,100</td><td class="align-right">-8.0%</td></tr><tr><td class="align-right">8</td><td>Landstar System</td><td class="align-right">$2,323</td><td class="align-right">$2,075</td><td class="align-right">-10.7%</td></tr><tr><td class="align-right">9</td><td>U.S. Xpress Enterprises1</td><td class="align-right">$1,698</td><td class="align-right">$1,500</td><td class="align-right">-11.7%</td></tr><tr><td class="align-right">10</td><td>CRST International1</td><td class="align-right">$1,668</td><td class="align-right">$1,597</td><td class="align-right">-4.3%</td></tr><tr><td class="align-right">11</td><td>Crete Carrier Corp.1</td><td class="align-right">$1,342</td><td class="align-right">$1,346</td><td class="align-right">0.3%</td></tr><tr><td class="align-right">12</td><td>Daseke1</td><td class="align-right">$1,277</td><td class="align-right">$1,050</td><td class="align-right">-17.8%</td></tr><tr><td class="align-right">13</td><td>Western Express1</td><td class="align-right">$1,054</td><td class="align-right">$1,062</td><td class="align-right">0.8%</td></tr><tr><td class="align-right">14</td><td>Heartland Express</td><td class="align-right">$1,207</td><td class="align-right">$1,048</td><td class="align-right">-13.2%</td></tr><tr><td class="align-right">15</td><td>PS Logistics</td><td class="align-right">$1,008</td><td class="align-right">$1,025</td><td class="align-right">1.7%</td></tr><tr><td class="align-right">16</td><td>NFI Industries</td><td class="align-right">$1,100</td><td class="align-right">$1,001</td><td class="align-right">-9.0%</td></tr><tr><td class="align-right">17</td><td>CR England</td><td class="align-right">$1,089</td><td class="align-right">$1,000</td><td class="align-right">-8.2%</td></tr><tr><td class="align-right">18</td><td>Ruan Transportation1</td><td class="align-right">$937</td><td class="align-right">$900</td><td class="align-right">-3.9%</td></tr><tr><td class="align-right">19</td><td>Stevens Transport1</td><td class="align-right">$765</td><td class="align-right">$803</td><td class="align-right">5.0%</td></tr><tr><td class="align-right">20</td><td>Hirschbach Motor Lines</td><td class="align-right">$808</td><td class="align-right">$777</td><td class="align-right">-3.8%</td></tr><tr><td class="align-right">21</td><td>Marten Transport</td><td class="align-right">$874</td><td class="align-right">$759</td><td class="align-right">-13.2%</td></tr><tr><td class="align-right">22</td><td>Covenant Transportation Group</td><td class="align-right">$696</td><td class="align-right">$742</td><td class="align-right">6.6%</td></tr><tr><td class="align-right">23</td><td>KLLM1</td><td class="align-right">$867</td><td class="align-right">$780</td><td class="align-right">-10.0%</td></tr><tr><td class="align-right">24</td><td>Universal Truckload</td><td class="align-right">$557</td><td class="align-right">$579</td><td class="align-right">3.9%</td></tr><tr><td class="align-right">25</td><td>Anderson Trucking Service1</td><td class="align-right">$675</td><td class="align-right">$565</td><td class="align-right">-16.3%</td></tr><tr class="phx-row-total"><td colspan="2">Total Top 25 US Truckload carriers</td><td class="align-right">$39,391</td><td class="align-right">$37,852</td><td class="align-right">-3.9%</td></tr></tbody><tfoot><tr><td colspan="5">1 SJ Consulting estimates</td></tr><tr class="phx-table-source"><td colspan="5">Sources: Company reports and SJ Consulting estimates. Prepared by SJ Consulting Group, Inc.© 2025 S&amp;P Global.</td></tr></tfoot></table></div></div>

The 25 largest US truckload carriers cut their way through the second year of a cyclical freight downturn in 2024, with soft freight demand and low rates pushing their combined revenue down 3.9% year over year to $37.9 billion, according to the SJ Consulting Group/Journal of Commerce Top 25 US Truckload Carrier rankings. Excess capacity made it difficult for truckload carriers to gain traction in the market, except through acquisitions. The largest truckload carriers reduced their capacity throughout the year, parking or selling underutilized trucks and dropping the Journal of Commerce Truckload Capacity Index (TCI) to its lowest level in a decade . Last year, revenue decreased at 17 of the Top 25 truckload carriers, an improvement compared with the 20 carriers in the rankings that lost revenue in 2023 , according to SJ Consulting data. Since 2022, the Top 25 truckload carriers have lost 12.1% of their revenue, which hit $43 billion in that peak year of the COVID-19 pandemic boom. This year isn’t expected to bring much improvement for truckload carriers, large or small. Heading into 2025, truckload executives were optimistic about the prospects for a rebound in demand and pricing. Nearly six months into the year, much of that optimism is gone. “There’s no sustained, steady demand coming this year,” said Jason Miller, the Eli Broad endowed professor of supply chain management at Michigan State University. Surges in US imports did nothing to lift the truckload sector out of the doldrums in 2024, and they’re not likely to do so in 2025, especially when the timing and extent of such surges shifts with the volatile trade policy of the Trump administration. “Temporary spikes are not enough to change the market direction,” Miller told the Journal of Commerce. Yet some believe the direction of the market is heading upward, albeit slowly. The latest RXO Curve forecast from logistics provider RXO noted that contract rates measured by the Cass Contract Rate Index turned positive year over year in the first quarter, rising 1.4%. Spot rates at RXO were up 9.1% year over year in the first quarter. Even so, for spot or contract rates, “a steep ramp upwards is unlikely,” RXO said. Highs and lows The Top 25 truckload carriers in the rankings represent a small fraction of the total number of truckload carriers. There were 53,705 long-distance truckload carriers in operation across the US in 2022, according to the latest US Economic Census, a five-year census of businesses in the US and a benchmark for economic activity. The census data, released in April, does not include one-truck owner-operators. Only 248 of the 53,705 carriers in the US Economic Census had more than 250 employees. From 2017 through 2022 — the last two economic censuses — the overall number of truckload providers increased 68.3%. The number of truckload firms with more than 250 employees increased 12.2% with the addition of just 27 carriers in that period. In that same five-year period, the number of firms with five employees or fewer increased by 70.1% to 26,941 companies. That reflects growth during the 2018 trucking boom and then the explosion of new carriers from 2020 through 2022. The Top 25 truckload carriers, all companies with more than $500 million in annual revenue, may be outnumbered by small carriers, but they haul large volumes of freight for large shippers, making them almost a separate industry sector of their own. The largest carriers in the rankings were J.B. Hunt Transport Services, with $4.1 billion in truckload-related revenue; Knight-Swift Transportation Holdings, with $3.5 billion; and Schneider National, with $2.6 billion, according to SJ Consulting Group research. Last year was the second at the top of the rankings for those three companies, yet they each lost revenue compared with 2023. J.B. Hunt’s truckload revenue dropped 5.4%; Knight-Swift’s truckload revenue, excluding US Xpress Enterprises, dropped 4%; and Schneider’s topline fell 3.3%, according to the data behind the rankings. Ryder System climbed from eighth in the rankings to fourth place, increasing its truckload-related revenue 37% year over year. The increase does not represent Ryder’s total revenue, which increased 7% last year, but its truckload-related revenue as defined by SJ Consulting Group. The acquisition of Cardinal Logistics in 2024 fueled that growth. Multiyear strategic initiatives also are driving Ryder’s growth, Robert E. Sanchez, chairman and CEO, told Wall Street analysts during a first-quarter earnings call in April. “The key driver of expected earnings growth in 2025 is incremental benefits ... related to our contractual lease, dedicated, and supply chain businesses,” Sanchez said. Ups and downs In addition to Ryder, the Top 25 carriers that increased revenue last year included Covenant Transportation Group (6.6%), Stevens Transport (5%), Universal Truckload (3.9%) and PS Logistics (1.7%), according to SJ Consulting Group data. An underlying lesson from Ryder is that diversification can be an effective strategy in dealing with a soft freight market and cautious customers. Many of the truckload carriers in the Top 25 rankings are pursuing more dedicated business rather than one-way truckload, or even, in the case of Knight-Swift, breaking into the less-than-truckload (LTL) market. The company that lost the most in terms of revenue was Daseke, a specialized heavy-haul conglomerate owned by TFI International. Daseke’s revenue dropped 17.8% year over year to $1.1 billion, according to SJ Consulting Group, which attributed the decline to lower demand for infrastructure and industrial project work for specialized trucking. However, Daseke retained its position as the 12th largest carrier in the rankings, a sign of how much revenue the overall market and the Top 25 group lost in 2024. The 17 carriers that lost revenue in 2024 saw that revenue drop 9% on average in 2024. Still, the combined revenue of the Top 25 truckload carriers was higher than in any year before 2022. From 2020 through 2022, that combined revenue shot up 38.7% and then dropped 12.1% through 2024. Altogether, nine carriers moved lower in the rankings last year, while six moved higher, and seven retained their rankings. Three new companies joined or rejoined the Top 25: Covenant Transportation Group, Universal Truckload and Anderson Trucking Services. The base level of revenue needed to get into the rankings fell from $722 million in 2023 to $565 million last year, a 21.8% decline. That’s an indicator of the depth of the demand-driven malaise in the truckload market. Contact William B. Cassidy at bill.cassidy@spglobal.com .Journal of Commerce Top 25 US Truckload Carriers Annual revenue, including fuel surcharges, in millions of US dollars 2024 Rank Carrier 2023 Revenue 2024 Revenue YoY Change 1 J.B. Hunt Transport Services $4,332 $4,097 -5.4% 2 Knight-Swift Transportation Holdings $3,683 $3,535 -4.0% 3 Schneider National $2,640 $2,552 -3.3% 4 Ryder System $1,785 $2,446 37.0% 5 Prime $2,524 $2,283 -9.5% 6 Penske Logistics $2,200 $2,230 1.4% 7 Werner Enterprises $2,282 $2,100 -8.0% 8 Landstar System $2,323 $2,075 -10.7% 9 U.S. Xpress Enterprises1 $1,698 $1,500 -11.7% 10 CRST International1 $1,668 $1,597 -4.3% 11 Crete Carrier Corp.1 $1,342 $1,346 0.3% 12 Daseke1 $1,277 $1,050 -17.8% 13 Western Express1 $1,054 $1,062 0.8% 14 Heartland Express $1,207 $1,048 -13.2% 15 PS Logistics $1,008 $1,025 1.7% 16 NFI Industries $1,100 $1,001 -9.0% 17 CR England $1,089 $1,000 -8.2% 18 Ruan Transportation1 $937 $900 -3.9% 19 Stevens Transport1 $765 $803 5.0% 20 Hirschbach Motor Lines $808 $777 -3.8% 21 Marten Transport $874 $759 -13.2% 22 Covenant Transportation Group $696 $742 6.6% 23 KLLM1 $867 $780 -10.0% 24 Universal Truckload $557 $579 3.9% 25 Anderson Trucking Service1 $675 $565 -16.3% Total Top 25 US Truckload carriers $39,391 $37,852 -3.9% 1 SJ Consulting estimates Sources: Company reports and SJ Consulting estimates. Prepared by SJ Consulting Group, Inc. © 2025 S&P Global.

Truckload

Journal of Commerce Rankings: Top 25 US truckload carriers still stuck in low gear

<div class="phx-topic abstract-wrapper">Labor shortages and low water levels in Europe are intensifying persistent port bottlenecks, while the trans-Pacific demand is pulling vessels out of Asia-Europe. </div>

Labor shortages and low water levels in Europe are intensifying persistent port bottlenecks, while the trans-Pacific demand is pulling vessels out of Asia-Europe.

<div class="phx-topic">Ocean shipping rates from Asia to Europe shot up ahead of this week’s June 1 freight-all-kinds (FAK) increases by carriers, with the substantial price hikes supported by mounting delays at severely congested port hubs at both ends of the trade lane. While port bottlenecks absorb capacity on Asia-Europe, surging demand on the trans-Pacific is prompting carriers to shift vessels to the booming China-US trade lane, putting further upward pressure on Asia-Europe rates. “Carriers are redeploying ships from Asia-Europe and other routes to the trans-Pacific routes, with the capacity in Asia-Europe dropping 17% in the week starting June 16 vs. the end of May,” HSBC noted in its weekly transportation update. “However, we think these are insufficient to address the cargo rush [on the trans-Pacific], while capacity reallocation could cause shortages in other corridors,” according to the bank’s analysts. Drewry highlighted in a recent market update that since late March, labor shortages and low Rhine River water levels have pushed up berth waiting times by 37% in Antwerp, 49% in Hamburg and 77% in Bremerhaven. In Asia, Shanghai and Singapore, the world’s busiest and second-busiest ports, respectively, are battling congestion driven by a rush of exports to the US during a 90-day tariff cooldown. <h3>Rate hikes, surcharges </h3>As capacity tightens, carriers are rolling out significant rate increases from Asia to both North Europe and the Mediterranean, as well as implementing “peak season surcharges” on some Mediterranean routes. Data from rate benchmarking platform Xeneta shows Asia-North Europe rates rose 23% on June 1 to $2,353 per FEU, with Asia-Mediterranean rates up 24% to $3,720/FEU. Data assessed by Platts, a sister company of the Journal of Commerce within S&amp;P Global, shows North Asia to North Europe rates rose $600 in the past week to $2,400/FEU, while Asia-Mediterranean rates increased $1,400 in the past week to $4,300/FEU. Several carriers are also raising their backhaul rates that have been below $200 per FEU since January. Mediterranean Shipping Co., Hapag-Lloyd and CMA CGM have set their Europe to Asia rate between $500/FEU and $530/FEU, with Cosco asking for $1,500/FEU. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean shipping rates from Asia to Europe shot up ahead of this week’s June 1 freight-all-kinds (FAK) increases by carriers, with the substantial price hikes supported by mounting delays at severely congested port hubs at both ends of the trade lane. While port bottlenecks absorb capacity on Asia-Europe, surging demand on the trans-Pacific is prompting carriers to shift vessels to the booming China-US trade lane, putting further upward pressure on Asia-Europe rates. “Carriers are redeploying ships from Asia-Europe and other routes to the trans-Pacific routes, with the capacity in Asia-Europe dropping 17% in the week starting June 16 vs. the end of May,” HSBC noted in its weekly transportation update. “However, we think these are insufficient to address the cargo rush [on the trans-Pacific], while capacity reallocation could cause shortages in other corridors,” according to the bank’s analysts. Drewry highlighted in a recent market update that since late March, labor shortages and low Rhine River water levels have pushed up berth waiting times by 37% in Antwerp, 49% in Hamburg and 77% in Bremerhaven. In Asia, Shanghai and Singapore, the world’s busiest and second-busiest ports, respectively, are battling congestion driven by a rush of exports to the US during a 90-day tariff cooldown. Rate hikes, surcharges As capacity tightens, carriers are rolling out significant rate increases from Asia to both North Europe and the Mediterranean, as well as implementing “peak season surcharges” on some Mediterranean routes. Data from rate benchmarking platform Xeneta shows Asia-North Europe rates rose 23% on June 1 to $2,353 per FEU, with Asia-Mediterranean rates up 24% to $3,720/FEU. Data assessed by Platts, a sister company of the Journal of Commerce within S&P Global, shows North Asia to North Europe rates rose $600 in the past week to $2,400/FEU, while Asia-Mediterranean rates increased $1,400 in the past week to $4,300/FEU. Several carriers are also raising their backhaul rates that have been below $200 per FEU since January. Mediterranean Shipping Co., Hapag-Lloyd and CMA CGM have set their Europe to Asia rate between $500/FEU and $530/FEU, with Cosco asking for $1,500/FEU. Contact Greg Knowler at greg.knowler@spglobal.com .

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