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

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

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<div class="phx-topic">The Port of Charleston plans to add a second big ship berth to its Hugh K. Leatherman marine terminal, with the terminal’s main customer, Mediterranean Shipping Co. (MSC), readying to bring new trans-Atlantic capacity to the port. The South Carolina State Ports Authority (SC Ports) said in a statement this week it began installing the test piles to ensure the integrity of a new 1,600-foot berth at Leatherman. The second berth, outfitted with five cranes, will allow the terminal to handle two super-post-Panamax vessels at once. SC Ports said it expects to complete the second berth by late 2026, bringing Leatherman’s capacity to about 1.6 million TEUs per year. The port’s board of directors approved an $88.5 million contract with Orion Marine Group for the preliminary work. Plans for a third berth at Leatherman, which would bring it to full capacity of 2.4 million TEUs, have yet to go forward. SC Ports said the cost of both the second and third berths could reach a total of $1.5 billion. In addition to the second berth, Leatherman will also be able to offer near-dock rail service with the opening of the Navy Base Intermodal Facility. SC Ports said it’s in the process of commissioning six rail-mounted gantry cranes for that facility, which is expected to open by early 2026. <h3>MSC adds services </h3>Leatherman’s sole berth has seen usage rise quickly a little over a year after SC Ports and the International Longshoremen’s Association (ILA) settled <a href="https://www.joc.com/article/sc-ports-strikes-deal-with-ila-to-fully-open-leatherman-marine-terminal-5192280">a legal dispute that kept ocean carriers away from the terminal</a>. Leatherman handled 45 vessels in the second quarter, according to data from Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. The Q2 vessel count was up from 33 ships in the first quarter and 23 in the fourth quarter of 2024. Zim Shipping became <a href="https://www.joc.com/article/zim-becomes-first-carrier-to-commit-to-reopened-leatherman-terminal-5735909">the first carrier to provide weekly service into Leatherman</a> following its reopening, but has since moved the service to Charleston’s other marine terminal. Now, Leatherman primarily handles MSC services from the Indian subcontinent and the Mediterranean. SC Ports said MSC will bring two additional trans-Atlantic services to Leatherman starting in September. Those include the “Albatros” service from Baltic ports and London’s Felixstowe, and the “Dragon” service between the Mediterranean and the US East Coast. Thanks to the presence of auto makers and other high-value manufacturing in South Carolina, Charleston sees relatively steady freight volumes coming from Europe. Since the start of 2024, containerized imports from Europe into Charleston have averaged 89,125 TEUs per quarter, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. Hapag-Lloyd carries the majority of the trans-Atlantic freight into Charleston, with its average quarterly volume around 29,590 TEUs, PIERS data shows. MSC is second with a quarterly average of 21,939 TEUs. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The Port of Charleston plans to add a second big ship berth to its Hugh K. Leatherman marine terminal, with the terminal’s main customer, Mediterranean Shipping Co. (MSC), readying to bring new trans-Atlantic capacity to the port. The South Carolina State Ports Authority (SC Ports) said in a statement this week it began installing the test piles to ensure the integrity of a new 1,600-foot berth at Leatherman. The second berth, outfitted with five cranes, will allow the terminal to handle two super-post-Panamax vessels at once. SC Ports said it expects to complete the second berth by late 2026, bringing Leatherman’s capacity to about 1.6 million TEUs per year. The port’s board of directors approved an $88.5 million contract with Orion Marine Group for the preliminary work. Plans for a third berth at Leatherman, which would bring it to full capacity of 2.4 million TEUs, have yet to go forward. SC Ports said the cost of both the second and third berths could reach a total of $1.5 billion. In addition to the second berth, Leatherman will also be able to offer near-dock rail service with the opening of the Navy Base Intermodal Facility. SC Ports said it’s in the process of commissioning six rail-mounted gantry cranes for that facility, which is expected to open by early 2026. MSC adds services Leatherman’s sole berth has seen usage rise quickly a little over a year after SC Ports and the International Longshoremen’s Association (ILA) settled a legal dispute that kept ocean carriers away from the terminal . Leatherman handled 45 vessels in the second quarter, according to data from Sea-web, a sister company of the Journal of Commerce within S&P Global. The Q2 vessel count was up from 33 ships in the first quarter and 23 in the fourth quarter of 2024. Zim Shipping became the first carrier to provide weekly service into Leatherman following its reopening, but has since moved the service to Charleston’s other marine terminal. Now, Leatherman primarily handles MSC services from the Indian subcontinent and the Mediterranean. SC Ports said MSC will bring two additional trans-Atlantic services to Leatherman starting in September. Those include the “Albatros” service from Baltic ports and London’s Felixstowe, and the “Dragon” service between the Mediterranean and the US East Coast. Thanks to the presence of auto makers and other high-value manufacturing in South Carolina, Charleston sees relatively steady freight volumes coming from Europe. Since the start of 2024, containerized imports from Europe into Charleston have averaged 89,125 TEUs per quarter, according to PIERS, a sister company of the Journal of Commerce within S&P Global. Hapag-Lloyd carries the majority of the trans-Atlantic freight into Charleston, with its average quarterly volume around 29,590 TEUs, PIERS data shows. MSC is second with a quarterly average of 21,939 TEUs. Contact Michael Angell at michael.angell@spglobal.com .

Maritime

Container Shipping News

Container lines

Port infrastructure

North American ports

Port News

Charleston’s Leatherman terminal eyes second berth by late 2026

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

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

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

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

Breakbulk News

Transport, Trade and Regulation News

Trans-Pacific

Tariff battle suppressing Chinese market for US soybean, meat exports

<div class="phx-topic abstract-wrapper">The carrier said trans-Pacific services have been especially susceptible to the erosion of business and consumer confidence and the disruption to long-term planning caused by frequent shifts in US tariff policy.</div>

The carrier said trans-Pacific services have been especially susceptible to the erosion of business and consumer confidence and the disruption to long-term planning caused by frequent shifts in US tariff policy.

<div class="phx-topic">Trade patterns shifting from global to more regional in nature partly due to changing tariff policies could offset the impact of US port charges on Chinese carriers, Hong Kong-listed Orient Overseas (International) said Thursday. That market segmentation, coupled with extended or restructured supply chains, could create new opportunities for shipping companies to refine their strategies, the company said in an interim earnings statement. The subsidiary of Cosco Shipping Holdings said US port charges that start on Oct. 14 “will have a relatively large impact” on its units, including carrier OOCL and OOCL Logistics. OOIL gave no details, but based on the current proposal from the US Trade Representative (USTR), 10,000-net-ton ships such as the 13,000-TEU OOCL Poland, deployed on OOCL’s Pacific China Central 1 service, will pay $3.5 million in the first year. That will rise to $9.8 million in 2028 when the levy climbs to $140 per net ton. OOIL said trans-Pacific services have been especially susceptible to the erosion of business and consumer confidence and the disruption to long-term planning caused by frequent shifts in US tariff policy. “As a result, many customers seem to have started to shift away from their precautious strategy of frontloading earlier this year to a more cautious, wait-and-see approach,” it said. Despite the challenges “our vessels sailing on major long-haul routes are nearly fully loaded, and this is expected to continue in the coming weeks,” the carrier said. <h3>OOIL H1 net profit up 15%</h3>While the trans-Pacific was OOCL’s biggest revenue earner in the first half of 2025, contributing $1.6 billion out of total liner revenues of $4.4 billion, the carrier faced increased competition. On the eastbound trans-Pacific headhaul, liftings increased 8%, but revenue per TEU fell 12% and overall revenue decreased 5%. Overall, OOIL saw net profit increase 15% to $954 million in the first six months compared with the year prior, of which 99% was contributed by OOCL and OOCL Logistics. Revenue rose 6.5% to $4.9 billion OOCL’s total liftings for the first half increased 7% to 4 million TEUs. “Despite being only a single-digit improvement, the year-on year performance is the best post-pandemic period in terms of both liftings and liner revenue,” OOIL said. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Trade patterns shifting from global to more regional in nature partly due to changing tariff policies could offset the impact of US port charges on Chinese carriers, Hong Kong-listed Orient Overseas (International) said Thursday. That market segmentation, coupled with extended or restructured supply chains, could create new opportunities for shipping companies to refine their strategies, the company said in an interim earnings statement. The subsidiary of Cosco Shipping Holdings said US port charges that start on Oct. 14 “will have a relatively large impact” on its units, including carrier OOCL and OOCL Logistics. OOIL gave no details, but based on the current proposal from the US Trade Representative (USTR), 10,000-net-ton ships such as the 13,000-TEU OOCL Poland, deployed on OOCL’s Pacific China Central 1 service, will pay $3.5 million in the first year. That will rise to $9.8 million in 2028 when the levy climbs to $140 per net ton. OOIL said trans-Pacific services have been especially susceptible to the erosion of business and consumer confidence and the disruption to long-term planning caused by frequent shifts in US tariff policy. “As a result, many customers seem to have started to shift away from their precautious strategy of frontloading earlier this year to a more cautious, wait-and-see approach,” it said. Despite the challenges “our vessels sailing on major long-haul routes are nearly fully loaded, and this is expected to continue in the coming weeks,” the carrier said. OOIL H1 net profit up 15% While the trans-Pacific was OOCL’s biggest revenue earner in the first half of 2025, contributing $1.6 billion out of total liner revenues of $4.4 billion, the carrier faced increased competition. On the eastbound trans-Pacific headhaul, liftings increased 8%, but revenue per TEU fell 12% and overall revenue decreased 5%. Overall, OOIL saw net profit increase 15% to $954 million in the first six months compared with the year prior, of which 99% was contributed by OOCL and OOCL Logistics. Revenue rose 6.5% to $4.9 billion OOCL’s total liftings for the first half increased 7% to 4 million TEUs. “Despite being only a single-digit improvement, the year-on year performance is the best post-pandemic period in terms of both liftings and liner revenue,” OOIL said. Contact Keith Wallis at keithwallis@hotmail.com .

Tariff-linked trade pattern shifts could offset impact of US port fees: OOIL

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

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

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

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

Trans-Atlantic

Trans-Atlantic carriers limit capacity cuts despite ongoing rate weakness

<div class="phx-topic abstract-wrapper">With a global capacity surplus in the offing, or already biting, now is a great time to invest and move capacity off surplus trades, writes Jeremy Masters. </div>

With a global capacity surplus in the offing, or already biting, now is a great time to invest and move capacity off surplus trades, writes Jeremy Masters.

<div class="phx-topic">In <a href="https://www.joc.com/article/high-variance-exists-in-carriers-cross-trade-products-6045899">my column of July 18</a>, we looked at the wide range of transshipment services that the top five operators are offering in non-core trades. At some point in the life of these trades, carriers will consider whether there is sufficient promise to deploy direct services. There are a number of motivations behind this. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6066828_0.1.jpg"></img></div>Carriers will want to have first-mover advantage. Transshipment — particularly between two deep-sea services — can produce very variable products. Carriers offering a direct service will have the chance to establish pole position. Secondly, those with suitable tonnage will see an opportunity. Some of the carriers’ raids of small- to mid-range tonnage in the secondhand markets (plus ongoing delivery of newbuilds) will have greater flexibility in feeder, regional and developing trades to upgrade from transshipment without swamping a trade with big ships. Finally, with all the capacity injections, both current and future, a glut beckons that will bring rates down on a widespread basis. As ships are moveable assets, they can quickly spread overcapacity contagion from one trade to another. New direct services will certainly not be enough to swing the dial back; carriers will need to be nimble on multiple capacity-eating fronts for that. But investing in new linkages and moving overcapacity out has some attractions. <h3>‘High-potential’ trades </h3>Using Container Trade Statistics’ (CTS’) extensive volume data at a granular level, we looked at several developing trades and arrived at the conclusion that there are many with high potential. In any new or expanded deployment, carriers will look at: a) the evolution of volumes in the trade and the expected utilization if they deploy a premium product; b) the evolution of rates in the trade, which in most cases will be reasonably healthy as a transshipment trade but might be impacted by an injection of new direct capacity; and c) the cost of ship, port and equipment systems, including imbalances. New direct connections are the obvious starting point, but carriers also have the possibility to link in feeder hubs and partially piggyback on other direct routes. This has the advantage of access to a wider pool of cargo and derisking developing trades that can be volatile. The <a href="https://www.joc.com/article/msc-will-expand-africa-us-trade-with-new-calls-6063823">announcement from Mediterranean Shipping Co.</a> that it will serve the US-to-West Africa trade as part of its South Africa service certainly adds one substantive trade to its direct network. But by offering the US Gulf, Mexico and parts of Central America to West Africa and South Africa off Freeport and connecting West Africa to South Africa, MSC opens up other important flows of developing business and the possibility for double-dipping. The East Coast of South America (ECSA) to West Africa is also emerging strongly. To serve this trade, carriers transship over the Mediterranean or North Europe with heavy diversion time. The least diverted is with MSC via Las Palmas in the Canary Islands, but that is still a combined 5,515 nautical miles ex-Rio to Abidjan in West Africa against 2,932 nautical miles direct. There are few obvious links to other trades, however, so carriers would need to be comfortable about getting critical mass just in these lanes. <h3>India-ECSA an ‘emerging trade’ </h3>A good example of an emerging trade that combines several themes is India to ECSA. There is an HMM product from Kattupalli East India to Brazil, and the big carriers have a variety of transshipment products from Northwest India via South Africa, Sri Lanka, Morocco and Singapore. Per CTS stats, volume indication from 2020 to date is as follows for India ports to ECSA TEUs: <div class="wrapper-full"><table><colgroup><col width="33.33%"></col><col width="33.33%"></col><col width="33.33%"></col></colgroup><thead><tr><th>Year</th><th class="align-right">Indian Sub Cont. to ECSA</th><th class="align-right">ECSA to Indian Sub Cont.</th></tr></thead><tbody><tr><td>2022 </td><td class="align-right">96,718 </td><td class="align-right">96,921</td></tr><tr><td>2023</td><td class="align-right">123,658</td><td class="align-right">105,835</td></tr><tr><td>2024</td><td class="align-right">149,615</td><td class="align-right">163,004</td></tr><tr><td>YTD 2025</td><td class="align-right">61,393</td><td class="align-right">89,274</td></tr></tbody><tfoot><tr><td colspan="3">Source: Container Trade Statistics</td></tr></tfoot></table></div>In addition to the positive progression in direct volumes, any carrier serving this trade naturally must go around the Cape of Good Hope, so a call at South African ports, although in competition with other direct services, offers a chance to significantly increase cargo catchment. There would, of course, be more competition in these directly-linked trades, but the following 2024 annual TEUs figures illustrate the opportunity: <div class="wrapper-full"><table><colgroup><col width="50%"></col><col width="50%"></col></colgroup><tbody><tr><td>Indian Sub Cont. to Southern Africa</td><td class="align-right">123,303</td></tr><tr><td>Southern Africa to ECSA</td><td class="align-right">10,128</td></tr><tr><td>ECSA to Southern Africa</td><td class="align-right">88,017</td></tr><tr><td>Southern Africa to Indian Sub Cont.</td><td class="align-right">151,591</td></tr></tbody><tfoot><tr><td colspan="2">Source: Container Trade Statistics</td></tr></tfoot></table></div>Adding an Indian Ocean transshipment hub such as Port Louis in Mauritius would offer more possibilities to mix-and-match markets and build a well-utilized, remunerative product. There are plenty of possibilities out there and carriers can do their homework on how trade volumes are developing. With a global capacity surplus in the offing, or already biting, now is a great time to invest and move capacity off surplus trades. Jeremy Masters is managing director of Shipping Masters. Contact him at <a href="mailto:jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>. </div>

In my column of July 18 , we looked at the wide range of transshipment services that the top five operators are offering in non-core trades. At some point in the life of these trades, carriers will consider whether there is sufficient promise to deploy direct services. There are a number of motivations behind this. Carriers will want to have first-mover advantage. Transshipment — particularly between two deep-sea services — can produce very variable products. Carriers offering a direct service will have the chance to establish pole position. Secondly, those with suitable tonnage will see an opportunity. Some of the carriers’ raids of small- to mid-range tonnage in the secondhand markets (plus ongoing delivery of newbuilds) will have greater flexibility in feeder, regional and developing trades to upgrade from transshipment without swamping a trade with big ships. Finally, with all the capacity injections, both current and future, a glut beckons that will bring rates down on a widespread basis. As ships are moveable assets, they can quickly spread overcapacity contagion from one trade to another. New direct services will certainly not be enough to swing the dial back; carriers will need to be nimble on multiple capacity-eating fronts for that. But investing in new linkages and moving overcapacity out has some attractions. ‘High-potential’ trades Using Container Trade Statistics’ (CTS’) extensive volume data at a granular level, we looked at several developing trades and arrived at the conclusion that there are many with high potential. In any new or expanded deployment, carriers will look at: a) the evolution of volumes in the trade and the expected utilization if they deploy a premium product; b) the evolution of rates in the trade, which in most cases will be reasonably healthy as a transshipment trade but might be impacted by an injection of new direct capacity; and c) the cost of ship, port and equipment systems, including imbalances. New direct connections are the obvious starting point, but carriers also have the possibility to link in feeder hubs and partially piggyback on other direct routes. This has the advantage of access to a wider pool of cargo and derisking developing trades that can be volatile. The announcement from Mediterranean Shipping Co. that it will serve the US-to-West Africa trade as part of its South Africa service certainly adds one substantive trade to its direct network. But by offering the US Gulf, Mexico and parts of Central America to West Africa and South Africa off Freeport and connecting West Africa to South Africa, MSC opens up other important flows of developing business and the possibility for double-dipping. The East Coast of South America (ECSA) to West Africa is also emerging strongly. To serve this trade, carriers transship over the Mediterranean or North Europe with heavy diversion time. The least diverted is with MSC via Las Palmas in the Canary Islands, but that is still a combined 5,515 nautical miles ex-Rio to Abidjan in West Africa against 2,932 nautical miles direct. There are few obvious links to other trades, however, so carriers would need to be comfortable about getting critical mass just in these lanes. India-ECSA an ‘emerging trade’ A good example of an emerging trade that combines several themes is India to ECSA. There is an HMM product from Kattupalli East India to Brazil, and the big carriers have a variety of transshipment products from Northwest India via South Africa, Sri Lanka, Morocco and Singapore. Per CTS stats, volume indication from 2020 to date is as follows for India ports to ECSA TEUs: Year Indian Sub Cont. to ECSA ECSA to Indian Sub Cont. 2022 96,718 96,921 2023 123,658 105,835 2024 149,615 163,004 YTD 2025 61,393 89,274 Source: Container Trade Statistics In addition to the positive progression in direct volumes, any carrier serving this trade naturally must go around the Cape of Good Hope, so a call at South African ports, although in competition with other direct services, offers a chance to significantly increase cargo catchment. There would, of course, be more competition in these directly-linked trades, but the following 2024 annual TEUs figures illustrate the opportunity: Indian Sub Cont. to Southern Africa 123,303 Southern Africa to ECSA 10,128 ECSA to Southern Africa 88,017 Southern Africa to Indian Sub Cont. 151,591 Source: Container Trade Statistics Adding an Indian Ocean transshipment hub such as Port Louis in Mauritius would offer more possibilities to mix-and-match markets and build a well-utilized, remunerative product. There are plenty of possibilities out there and carriers can do their homework on how trade volumes are developing. With a global capacity surplus in the offing, or already biting, now is a great time to invest and move capacity off surplus trades. Jeremy Masters is managing director of Shipping Masters. Contact him at jeremy@shippingmastershk.com .

A sea of opportunities exists to swap transshipment for direct services

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

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

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

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

Asia-Europe

Tight Asia feeder capacity causing disruption for export, import shippers

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

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

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

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

Ocean carriers are not helpless when it comes to managing capacity

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

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

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

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

Supply chain

Ro/ro cargo

Marine terminals

Michigan inland port offers new option for Great Lakes containerized freight

Current period

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PIERS containerized US import and export volumes is the transportation industry’s largest US waterborne trade data set, covering all US ports. Every day, the PIERS team processes an average of about 60,000 bills of lading filed with US Customs and Border Protection (CBP) and integrates this transactional trade data with standardized company details. PIERS contains US trade data going back to 2003. [PIERS](https://www.spglobal.com/marketintelligence/en/mi/products/piers.html)

US YTD container imports (PIERS)

PIERS US total imports volume last 10 years (YTD) (year-over-year change) Gateway

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

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

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

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

Intermodal providers

Rail News

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

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

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

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

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

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

<div class="phx-topic abstract-wrapper">With 70% of its volume moving under spot rates, there was no escape from the volatile US-China tariff battle.</div>

With 70% of its volume moving under spot rates, there was no escape from the volatile US-China tariff battle.

<div class="phx-topic">Zim Integrated Shipping Services’ heavy exposure to the trans-Pacific spot market dragged down its revenue, earnings and volume in a tariff-disrupted second quarter. While the carrier doubles down on cost controls and improving its fleet management, there was no escape from the volatile US-China tariff dispute with 70% of its volume exposed to spot rates. “It has been an unpredictable 2025 so far, with wide swings in freight rates, but we are confident in our competitive position in the industry,” Eli Glickman, Zim’s president and CEO, told analysts during an earnings call Wednesday. Following a good start to the year, the next three months for Zim were highly disruptive as US tariffs on China were increased to 145% in early April, causing rates to tumble amid an abrupt halt to cargo bookings. Then, in early May, the White House announced a 90-day pause on tariffs, which led to a rush to load cargo as well as soaring rates. Zim’s average spot rates in the second quarter fell 12% to $1,479 per TEU, while volume dropped 6% to 895,000 TEUs. Those combined to push revenue down 15% year over year to $1.64 billion. Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 38% to $472 million, earnings before interest and taxes (EBIT) of $149 million was down 69%, and net profit of $24 million plummeted 94% compared with the same quarter last year, Zim said. Despite the battered balance sheet, Zim’s executives remained confident in their outlook, raising the lower range of the carrier’s full-year profit expectations. Zim now expects to generate EBITDA of between $1.8 billion and $2.2 billion (up from a previous forecast of $1.6 billion to $2.2 billion), and EBIT of $550 million to $950 million (compared with $350 million to $950 million previously). <h3>Late-quarter surge in rates </h3>The new outlook reflects a lag in second quarter rates that rose sharply following the US’ 90-day pause on China tariffs, which will bolster third-quarter earnings, according to Zim CFO Xavier Destriau. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="2c8b6ebc-0a77-4206-b047-7f98dae05cb8"></dynamic-object></div>“The surge in rates that we experienced towards the second half of the second quarter were only partially recorded in Q2 and some of those rates and bills of lading will find their way into the third quarter,” Destriau told the Journal of Commerce in an interview. “We don’t have high expectations of a strong peak season in the third quarter, but we’ve benefited from strong volume in July and that will be stabilizing in a way,” he added. “Year over year, we don’t expect volume to fade, but we don’t expect a build-up of volume and rates might remain depressed.” Destriau said that scenario would likely prevail into the fourth quarter. Zim executives highlighted the carrier’s capacity management flexibility, pointing out that the renewal of 12 chartered vessels whose contracts expire in the second half of the year and 22 vessels up for renewal next year would depend on demand. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Zim Integrated Shipping Services’ heavy exposure to the trans-Pacific spot market dragged down its revenue, earnings and volume in a tariff-disrupted second quarter. While the carrier doubles down on cost controls and improving its fleet management, there was no escape from the volatile US-China tariff dispute with 70% of its volume exposed to spot rates. “It has been an unpredictable 2025 so far, with wide swings in freight rates, but we are confident in our competitive position in the industry,” Eli Glickman, Zim’s president and CEO, told analysts during an earnings call Wednesday. Following a good start to the year, the next three months for Zim were highly disruptive as US tariffs on China were increased to 145% in early April, causing rates to tumble amid an abrupt halt to cargo bookings. Then, in early May, the White House announced a 90-day pause on tariffs, which led to a rush to load cargo as well as soaring rates. Zim’s average spot rates in the second quarter fell 12% to $1,479 per TEU, while volume dropped 6% to 895,000 TEUs. Those combined to push revenue down 15% year over year to $1.64 billion. Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 38% to $472 million, earnings before interest and taxes (EBIT) of $149 million was down 69%, and net profit of $24 million plummeted 94% compared with the same quarter last year, Zim said. Despite the battered balance sheet, Zim’s executives remained confident in their outlook, raising the lower range of the carrier’s full-year profit expectations. Zim now expects to generate EBITDA of between $1.8 billion and $2.2 billion (up from a previous forecast of $1.6 billion to $2.2 billion), and EBIT of $550 million to $950 million (compared with $350 million to $950 million previously). Late-quarter surge in rates The new outlook reflects a lag in second quarter rates that rose sharply following the US’ 90-day pause on China tariffs, which will bolster third-quarter earnings, according to Zim CFO Xavier Destriau. “The surge in rates that we experienced towards the second half of the second quarter were only partially recorded in Q2 and some of those rates and bills of lading will find their way into the third quarter,” Destriau told the Journal of Commerce in an interview. “We don’t have high expectations of a strong peak season in the third quarter, but we’ve benefited from strong volume in July and that will be stabilizing in a way,” he added. “Year over year, we don’t expect volume to fade, but we don’t expect a build-up of volume and rates might remain depressed.” Destriau said that scenario would likely prevail into the fourth quarter. Zim executives highlighted the carrier’s capacity management flexibility, pointing out that the renewal of 12 chartered vessels whose contracts expire in the second half of the year and 22 vessels up for renewal next year would depend on demand. Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Pacific spot market exposure drags down Zim’s Q2 earnings

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

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<div class="phx-topic abstract-wrapper">Less-than-truckload costs are up 7.3% year over year, according to the latest US data, but changes to the LTL classification system are adding little, if anything, to shipper rates. </div>

Less-than-truckload costs are up 7.3% year over year, according to the latest US data, but changes to the LTL classification system are adding little, if anything, to shipper rates.

<div class="phx-topic">Revisions to the US less-than-truckload (LTL) classification system that were expected to result in higher LTL costs have proven more of a damp squib than a high explosive. Almost a month after the <a href="https://www.joc.com/article/lack-of-accurate-data-a-threat-to-us-shippers-as-ltl-reclassification-nears-5990210">July 19 implementation</a> of the new National Motor Freight Classification (NMFC), shippers, carriers and logistics providers report little to no change in freight invoices. Carriers are reporting few complaints from customers, if any. LTL rates continue to rise, but little if any of that increase can be attributed to changes to the NMFC. The US long-distance LTL producer price index (PPI) — a measure of all-inclusive LTL costs — rose 1.7% from June to 265.45 in July, a 7.3% year-over-year gain, according to data released by the US Bureau of Labor Statistics (BLS) Thursday. LTL costs are now 15% higher than they were when the then third-largest provider Yellow collapsed in July 2023, according to the BLS PPI index, now at a record high. The fear was that the “reimagination” of the NMFC would push rates even higher. The changes to the NMFC shifted more than 2,000 products or commodities into classes determined by density alone, rather than other shipping characteristics. Although the NMFC does not set pricing, it helps determine how shipments are priced. In interviews over the past month, large shippers told the Journal of Commerce they either prepared for the revised NMFC ahead of time or that the revisions didn’t affect their freight or their business. Many used FAK (freight-all-kinds) pricing methods for LTL freight. That’s not what LTL executives expected from the biggest overhaul to the NMFC — a system of classifying commodities used to create LTL pricing structures — in its 90-year history. “Leading up to [the revisions], about two months prior, we got a lot of questions,” National Motor Freight Traffic Association (NMFTA) COO Joe Ohr told the Journal of Commerce. “But the level of preparation the industry did was amazing.” (The NMFTA oversees the NMFC).“We’re pleasantly surprised,” said Geoff Muessig, chief marketing officer at Pitt Ohio, a multi-regional LTL provider based in Pittsburgh. Pitt Ohio spent several months prepping its customers for classification changes, and Muessig expected some pricing shock. However, in the past month, “I have not seen any significant change in invoice amounts,” Muessig told the Journal of Commerce. “Customer acceptance [of the revisions] has been solid. We’ve had very few requests to make changes to price structures.” “We expected pricing adjustments, calls and complaints, but it’s been quiet for us, and many of the carriers we work with have said it’s been quite quiet,” said Mich Fabriga, vice president of LTL pricing for AFS Logistics, a third-party logistics provider. AFS Logistics handles freight bill auditing for shipper customers. Fabriga told the Journal of Commerce he has seen minor changes to billing caused by the NMFC revisions. “We’re not seeing the big uproar we were expecting” in the wake of NMFC revisions, he said. “It’s almost like a Y2K moment,” he added, referring to the much-predicted computer apocalypse that failed to materialize when 1999 ended and 2000 began. <h3>A muted marketplace </h3>There are several possible reasons why the impact of the NMFC revisions has been muted. One is that many shippers, especially large-volume shippers, did indeed prepare. “Many customers certainly did the research, they made the changes” needed to avoid price increases, said Muessig, namely providing their LTL carriers with accurate information on shipment dimensions and weight to determine density. “My take is the marketplace has absorbed the change,” he said. It’s also early in the data collection process, AFS’ Fabriga said. “It’s probably too early” to make definitive statements about the impact of the classification changes, he acknowledged. Larger shippers are also more likely to use FAK pricing embedded in their contracts to avoid relying on class-based rates, Muessig noted. The impact of the NMFC revisions may become more apparent as annual contracts come up for negotiation. FedEx Freight, the largest US LTL provider, <a href="https://www.joc.com/article/fedex-freight-delays-enforcement-of-ltl-re-classification-6047284">delayed implementing the NMFC revisions</a> until Dec. 1, giving thousands of shippers a 150-day reprieve. FedEx Freight said shippers needed more time to get ready for the new classifications. But the rest of the LTL sector did not automatically follow suit. “In terms of the [NMFC] changes, look, we’re not backing down on the implementation,” Matthew Batteh, CFO at Saia, told Wall Street analysts during a July 25 earnings call. Saia runs 75% of its freight through equipment that captures shipment dimensions every day, Batteh said. “We sell space on our trailers, and this aligns more of the book to be density-based,” he said. “We’ve invested heavily in dimensioners for that exact reason.” <h3>Absorbing change </h3>Others have questioned whether LTL carriers would enforce changes that could raise rates in a soft LTL freight market. “Carriers aren’t being very strict about it,” said Satish Jindel, president of SJ Consulting Group, a transportation research firm. “Many carriers aren’t set up to capture dimensions and shippers aren’t set up to supply dimensions,” Jindel said. “They both are not letting go of the old system.” It’s also not clear that carriers have much to gain by pushing shippers — especially large customers that provide high volumes of freight in critical lanes. Smaller shippers with low LTL volumes and irregular shipping are most likely absorbing higher costs, but as they deal with increased costs related to higher US tariffs, the NMFC revisions may be the least of their worries. “When we say improve your packaging to improve density, that sounds like an easy ask, but it’s actually not,” Fabriga said. “You often simply can’t add or subtract product to adjust the size of your shipment,” he added. “The cost of offsetting the change can be higher than the revised rate itself.” Contact William B. Cassidy at <a href="mailto://bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

Revisions to the US less-than-truckload (LTL) classification system that were expected to result in higher LTL costs have proven more of a damp squib than a high explosive. Almost a month after the July 19 implementation of the new National Motor Freight Classification (NMFC), shippers, carriers and logistics providers report little to no change in freight invoices. Carriers are reporting few complaints from customers, if any. LTL rates continue to rise, but little if any of that increase can be attributed to changes to the NMFC. The US long-distance LTL producer price index (PPI) — a measure of all-inclusive LTL costs — rose 1.7% from June to 265.45 in July, a 7.3% year-over-year gain, according to data released by the US Bureau of Labor Statistics (BLS) Thursday. LTL costs are now 15% higher than they were when the then third-largest provider Yellow collapsed in July 2023, according to the BLS PPI index, now at a record high. The fear was that the “reimagination” of the NMFC would push rates even higher. The changes to the NMFC shifted more than 2,000 products or commodities into classes determined by density alone, rather than other shipping characteristics. Although the NMFC does not set pricing, it helps determine how shipments are priced. In interviews over the past month, large shippers told the Journal of Commerce they either prepared for the revised NMFC ahead of time or that the revisions didn’t affect their freight or their business. Many used FAK (freight-all-kinds) pricing methods for LTL freight. That’s not what LTL executives expected from the biggest overhaul to the NMFC — a system of classifying commodities used to create LTL pricing structures — in its 90-year history. “Leading up to [the revisions], about two months prior, we got a lot of questions,” National Motor Freight Traffic Association (NMFTA) COO Joe Ohr told the Journal of Commerce. “But the level of preparation the industry did was amazing.” (The NMFTA oversees the NMFC). “We’re pleasantly surprised,” said Geoff Muessig, chief marketing officer at Pitt Ohio, a multi-regional LTL provider based in Pittsburgh. Pitt Ohio spent several months prepping its customers for classification changes, and Muessig expected some pricing shock. However, in the past month, “I have not seen any significant change in invoice amounts,” Muessig told the Journal of Commerce. “Customer acceptance [of the revisions] has been solid. We’ve had very few requests to make changes to price structures.” “We expected pricing adjustments, calls and complaints, but it’s been quiet for us, and many of the carriers we work with have said it’s been quite quiet,” said Mich Fabriga, vice president of LTL pricing for AFS Logistics, a third-party logistics provider. AFS Logistics handles freight bill auditing for shipper customers. Fabriga told the Journal of Commerce he has seen minor changes to billing caused by the NMFC revisions. “We’re not seeing the big uproar we were expecting” in the wake of NMFC revisions, he said. “It’s almost like a Y2K moment,” he added, referring to the much-predicted computer apocalypse that failed to materialize when 1999 ended and 2000 began. A muted marketplace There are several possible reasons why the impact of the NMFC revisions has been muted. One is that many shippers, especially large-volume shippers, did indeed prepare. “Many customers certainly did the research, they made the changes” needed to avoid price increases, said Muessig, namely providing their LTL carriers with accurate information on shipment dimensions and weight to determine density. “My take is the marketplace has absorbed the change,” he said. It’s also early in the data collection process, AFS’ Fabriga said. “It’s probably too early” to make definitive statements about the impact of the classification changes, he acknowledged. Larger shippers are also more likely to use FAK pricing embedded in their contracts to avoid relying on class-based rates, Muessig noted. The impact of the NMFC revisions may become more apparent as annual contracts come up for negotiation. FedEx Freight, the largest US LTL provider, delayed implementing the NMFC revisions until Dec. 1, giving thousands of shippers a 150-day reprieve. FedEx Freight said shippers needed more time to get ready for the new classifications. But the rest of the LTL sector did not automatically follow suit. “In terms of the [NMFC] changes, look, we’re not backing down on the implementation,” Matthew Batteh, CFO at Saia, told Wall Street analysts during a July 25 earnings call. Saia runs 75% of its freight through equipment that captures shipment dimensions every day, Batteh said. “We sell space on our trailers, and this aligns more of the book to be density-based,” he said. “We’ve invested heavily in dimensioners for that exact reason.” Absorbing change Others have questioned whether LTL carriers would enforce changes that could raise rates in a soft LTL freight market. “Carriers aren’t being very strict about it,” said Satish Jindel, president of SJ Consulting Group, a transportation research firm. “Many carriers aren’t set up to capture dimensions and shippers aren’t set up to supply dimensions,” Jindel said. “They both are not letting go of the old system.” It’s also not clear that carriers have much to gain by pushing shippers — especially large customers that provide high volumes of freight in critical lanes. Smaller shippers with low LTL volumes and irregular shipping are most likely absorbing higher costs, but as they deal with increased costs related to higher US tariffs, the NMFC revisions may be the least of their worries. “When we say improve your packaging to improve density, that sounds like an easy ask, but it’s actually not,” Fabriga said. “You often simply can’t add or subtract product to adjust the size of your shipment,” he added. “The cost of offsetting the change can be higher than the revised rate itself.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

Surface

US LTL rates still rising after muted response to shipment reclassification

<div class="phx-topic abstract-wrapper">Traditional retailers in the US are scaling back their space requirements, according to an annual report, as the volatility over tariffs trickles down to the industrial real estate market.</div>

Traditional retailers in the US are scaling back their space requirements, according to an annual report, as the volatility over tariffs trickles down to the industrial real estate market.

<div class="phx-topic">US tariff uncertainty is holding back retailers from taking a larger warehousing footprint, fueling demand for domestic manufacturing facilities and giving third-party logistics companies (3PLs) a larger share of the available pipeline of industrial space, according to JLL’s annual Industrial Tenant Demand Study. Traditional retailers in the US have scaled back their industrial space requirements by 16.7% year over year, according to data collected by JLL during the first half of 2025. In contrast, 3PLs expanded their footprint by 12.8% in the same period. Still, overall demand is down almost 11%, marking the third year in a row with demand reductions. “[3PLs are] looking for incremental space,” Daniel Stephen Letter, president and director of Prologis, the largest US industrial real estate firm as measured by square footage, said during a July 16 earnings call. “We’re seeing this mostly from the larger 3PLs, many of them are unphased by all the noise in the macro picture.” Additionally, the average warehouse vacancy rate in the US rose to 7.1% in the second quarter — the highest level in over a decade and up one percentage point from the second quarter of 2024, commercial real estate services firm Cushman &amp; Wakefield said in its second-quarter industrial real estate report. Meanwhile, JLL said first-half demand for warehousing and distribution was down 14.6% compared with a year ago. JLL said the juxtaposition of the two trends signals retailers are becoming more cautious as logistics providers prepare for potential supply chain disruptions. Prologis said 3PLs accounted for about one-third of the company’s leasing in the second quarter. <h3>Significant 3PL growth </h3>In a sign of their growth, the number of 3PLs occupying the top 100 largest US industrial real estate leases rose in the first quarter of 2025, with 38 3PLs managing 28.9 million square feet — a 35% increase in square footage from the first quarter of 2024, when 28 3PLS controlled 20.6 million square feet. <a href="https://www.joc.com/article/multiplying-supply-chain-risks-drive-growth-for-global-us-based-logistics-firms-6026573">Amazon tops the annual revenue rankings</a> of both domestic and global 3PLs by logistics research firm Armstrong &amp; Associates, with $156.2 billion in 3PL-related revenue. Meanwhile, DHL Supply Chain &amp; Global Forwarding came in second in the global 3PL rankings, followed by Kuehne + Nagel. The Armstrong report said risk created by trade uncertainty and other geopolitical conflicts <a href="https://www.joc.com/article/multiplying-supply-chain-risks-drive-growth-for-global-us-based-logistics-firms-6026573">will help push global gross 3PL revenue up</a> another 2.7% in 2025 to $1.25 trillion. That revenue should grow again by 4.9% in 2026 to $1.3 trillion, it said. Amid the growth, 3PLs accounted for 13% of build-to-suit projects in 2025 in data JLL collected during the first half of 2025 — the largest share of any industry, JLL said. According to Prologis CFO Timothy D. Arndt, build-to-suit starts for the first half of 2025 totaled $1.1 billion — the largest start to a year that the company has ever had. “In terms of capital deployment, we started over $900 million in new development starts — nearly 65% of which was build-to-suit activity across seven additional projects in both U.S. and Europe,” Arndt said on Prologis’ earnings call. “Beyond this activity, we have signed for an additional three build-to-suits post quarter end.” <h3>Hesitant to commit </h3>Overall, importers are seeking more agile leasing options. Lessees are shifting toward short-term renewals and away from long-term commitments “as they evaluate how evolving global supply chain strategies might impact their space requirements,” JLL wrote in its report. Meanwhile, industrial lessees are slower to move lately, said JLL, with potential lessees staying on the market for an average of 11 months — up almost 70% compared with 6.5 months observed in the fourth quarter of last year. By 2026, JLL projects that figure to reach 14 months. “At the fundamental level, immediate tariff effects have resulted in a pause of deals and decision deferment among occupiers,” said JLL. As tariffs dampen leasing decisions, manufacturing is still showing signs of momentum, with leasing demand up 9% year over year in data collected by JLL during the first half of 2025. The firm noted the shift to manufacturing continues to be a long-term pattern, with those investments taking as long as five years to come to fruition in some cases, said JLL. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

US tariff uncertainty is holding back retailers from taking a larger warehousing footprint, fueling demand for domestic manufacturing facilities and giving third-party logistics companies (3PLs) a larger share of the available pipeline of industrial space, according to JLL’s annual Industrial Tenant Demand Study. Traditional retailers in the US have scaled back their industrial space requirements by 16.7% year over year, according to data collected by JLL during the first half of 2025. In contrast, 3PLs expanded their footprint by 12.8% in the same period. Still, overall demand is down almost 11%, marking the third year in a row with demand reductions. “[3PLs are] looking for incremental space,” Daniel Stephen Letter, president and director of Prologis, the largest US industrial real estate firm as measured by square footage, said during a July 16 earnings call. “We’re seeing this mostly from the larger 3PLs, many of them are unphased by all the noise in the macro picture.” Additionally, the average warehouse vacancy rate in the US rose to 7.1% in the second quarter — the highest level in over a decade and up one percentage point from the second quarter of 2024, commercial real estate services firm Cushman & Wakefield said in its second-quarter industrial real estate report. Meanwhile, JLL said first-half demand for warehousing and distribution was down 14.6% compared with a year ago. JLL said the juxtaposition of the two trends signals retailers are becoming more cautious as logistics providers prepare for potential supply chain disruptions. Prologis said 3PLs accounted for about one-third of the company’s leasing in the second quarter. Significant 3PL growth In a sign of their growth, the number of 3PLs occupying the top 100 largest US industrial real estate leases rose in the first quarter of 2025, with 38 3PLs managing 28.9 million square feet — a 35% increase in square footage from the first quarter of 2024, when 28 3PLS controlled 20.6 million square feet. Amazon tops the annual revenue rankings of both domestic and global 3PLs by logistics research firm Armstrong & Associates, with $156.2 billion in 3PL-related revenue. Meanwhile, DHL Supply Chain & Global Forwarding came in second in the global 3PL rankings, followed by Kuehne + Nagel. The Armstrong report said risk created by trade uncertainty and other geopolitical conflicts will help push global gross 3PL revenue up another 2.7% in 2025 to $1.25 trillion. That revenue should grow again by 4.9% in 2026 to $1.3 trillion, it said. Amid the growth, 3PLs accounted for 13% of build-to-suit projects in 2025 in data JLL collected during the first half of 2025 — the largest share of any industry, JLL said. According to Prologis CFO Timothy D. Arndt, build-to-suit starts for the first half of 2025 totaled $1.1 billion — the largest start to a year that the company has ever had. “In terms of capital deployment, we started over $900 million in new development starts — nearly 65% of which was build-to-suit activity across seven additional projects in both U.S. and Europe,” Arndt said on Prologis’ earnings call. “Beyond this activity, we have signed for an additional three build-to-suits post quarter end.” Hesitant to commit Overall, importers are seeking more agile leasing options. Lessees are shifting toward short-term renewals and away from long-term commitments “as they evaluate how evolving global supply chain strategies might impact their space requirements,” JLL wrote in its report. Meanwhile, industrial lessees are slower to move lately, said JLL, with potential lessees staying on the market for an average of 11 months — up almost 70% compared with 6.5 months observed in the fourth quarter of last year. By 2026, JLL projects that figure to reach 14 months. “At the fundamental level, immediate tariff effects have resulted in a pause of deals and decision deferment among occupiers,” said JLL. As tariffs dampen leasing decisions, manufacturing is still showing signs of momentum, with leasing demand up 9% year over year in data collected by JLL during the first half of 2025. The firm noted the shift to manufacturing continues to be a long-term pattern, with those investments taking as long as five years to come to fruition in some cases, said JLL. Contact Laura Robb at laura.robb@spglobal.com . 

Industrial Real Estate News

Retailers cut back on warehouse space as supply chain hurdles fuel 3PL growth

<div class="phx-topic abstract-wrapper">Carriers have responded by adjusting schedules and blanking sailings, but the capacity management has so far failed to hold up prices on the trade lane.</div>

Carriers have responded by adjusting schedules and blanking sailings, but the capacity management has so far failed to hold up prices on the trade lane.

<div class="phx-topic">The spot market on the Asia-Europe ocean trade continues to decline as carriers battle to overcome a growing capacity overhang despite reports of solid demand through the summer and ongoing port congestion in Europe. While carriers have responded by adjusting schedules and blanking sailings on routes to both North Europe and the Mediterranean, pulling the capacity management levers has not yet been able to slow the steadily falling rates. Hapag-Lloyd CEO Rolf Habben Jansen told analysts during a first-half earnings call Thursday that bookings on Asia-Europe remain “robust.” And although rates were falling, he described that as normal for this time of year. “Sometimes the peak season ends a little bit early, and right now it looks like we won’t see a strong peak running up to the end of September,” the CEO said. “Volumes into Europe have been pretty steady, and bookings are still robust, but we now need to see what happens in the coming couple of weeks.” Asia to North Europe spot rates of $2,700 per FEU this week are half the level recorded at the beginning of January and have fallen 15% in the past two months, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Asia-Mediterranean rates have been on an even more dramatic slide, falling 44% in the past two months to this week’s price of $2,600/FEU, also a decline of 50% compared with the first week of January. “Carriers face an immense challenge in preventing freight rates from falling further against the backdrop of significant overcapacity in the global fleet,” Emily Stausbøll, senior analyst at rate benchmarking platform Xeneta, noted in a recent market update. “It is unlikely the Red Sea will open up to container shipping at large during 2025, but in this scenario the challenge facing carriers in managing capacity would increase exponentially,” she added. <h3>Conservative capacity cuts </h3>The order book is currently at 9.3 million TEUs, or 29% of the in-service container shipping fleet, according to Sea-web, a sister company of the Journal of Commerce. Just over 1.2 million TEUs of vessels above 14,501 TEUs are expected to be delivered this year, mostly for Asia-Europe, while just 91,000 TEUs will be scrapped. Carriers are blanking sailings in an attempt to slow the rate decline but remain surprisingly conservative in their capacity withdrawals. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="eebb48eb-ad03-4e0f-a647-67693692edb4"></dynamic-object></div>Asia-North Europe carriers will deploy 1.1 million TEUs in capacity in August while blanking 94,470 TEUs, down from the 120,000 TEUs blanked in July, data from visibility provider eeSea shows. Capacity available in September will drop to just over 1 million TEUs, with blank sailings of 42,601 TEUs. Destine Ozuygur, chief analyst at eeSea, said the persistent port congestion in Europe could be contributing to carriers announcing fewer blanks during August and September on Asia-North Europe. “Blanks last August accounted for about 13% of planned calls, and 15% of total planned calls in September, while this year it shapes up to 11% of planned calls in August and just 6% in September,” Ozuygur told the Journal of Commerce. C.H. Robinson advised Asia-Europe shippers in a recent market update to continue booking space three to four weeks ahead, as August capacity was expected to remain tight despite demand softening in some segments. “The combination of port congestion and deliberate capacity cuts favors advance planning over spot market strategies,” the forwarder noted. Schedule reliability data for the Asia-North Europe trade lane reveals the impact of the port bottlenecks. After reaching a 2025 high of 45% in May, on-time performance on the trade lane in July was 28%, according to eeSea. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The spot market on the Asia-Europe ocean trade continues to decline as carriers battle to overcome a growing capacity overhang despite reports of solid demand through the summer and ongoing port congestion in Europe. While carriers have responded by adjusting schedules and blanking sailings on routes to both North Europe and the Mediterranean, pulling the capacity management levers has not yet been able to slow the steadily falling rates. Hapag-Lloyd CEO Rolf Habben Jansen told analysts during a first-half earnings call Thursday that bookings on Asia-Europe remain “robust.” And although rates were falling, he described that as normal for this time of year. “Sometimes the peak season ends a little bit early, and right now it looks like we won’t see a strong peak running up to the end of September,” the CEO said. “Volumes into Europe have been pretty steady, and bookings are still robust, but we now need to see what happens in the coming couple of weeks.” Asia to North Europe spot rates of $2,700 per FEU this week are half the level recorded at the beginning of January and have fallen 15% in the past two months, according to Platts, a sister company of the Journal of Commerce within S&P Global. Asia-Mediterranean rates have been on an even more dramatic slide, falling 44% in the past two months to this week’s price of $2,600/FEU, also a decline of 50% compared with the first week of January. “Carriers face an immense challenge in preventing freight rates from falling further against the backdrop of significant overcapacity in the global fleet,” Emily Stausbøll, senior analyst at rate benchmarking platform Xeneta, noted in a recent market update. “It is unlikely the Red Sea will open up to container shipping at large during 2025, but in this scenario the challenge facing carriers in managing capacity would increase exponentially,” she added. Conservative capacity cuts The order book is currently at 9.3 million TEUs, or 29% of the in-service container shipping fleet, according to Sea-web, a sister company of the Journal of Commerce. Just over 1.2 million TEUs of vessels above 14,501 TEUs are expected to be delivered this year, mostly for Asia-Europe, while just 91,000 TEUs will be scrapped. Carriers are blanking sailings in an attempt to slow the rate decline but remain surprisingly conservative in their capacity withdrawals. Asia-North Europe carriers will deploy 1.1 million TEUs in capacity in August while blanking 94,470 TEUs, down from the 120,000 TEUs blanked in July, data from visibility provider eeSea shows. Capacity available in September will drop to just over 1 million TEUs, with blank sailings of 42,601 TEUs. Destine Ozuygur, chief analyst at eeSea, said the persistent port congestion in Europe could be contributing to carriers announcing fewer blanks during August and September on Asia-North Europe. “Blanks last August accounted for about 13% of planned calls, and 15% of total planned calls in September, while this year it shapes up to 11% of planned calls in August and just 6% in September,” Ozuygur told the Journal of Commerce. C.H. Robinson advised Asia-Europe shippers in a recent market update to continue booking space three to four weeks ahead, as August capacity was expected to remain tight despite demand softening in some segments. “The combination of port congestion and deliberate capacity cuts favors advance planning over spot market strategies,” the forwarder noted. Schedule reliability data for the Asia-North Europe trade lane reveals the impact of the port bottlenecks. After reaching a 2025 high of 45% in May, on-time performance on the trade lane in July was 28%, according to eeSea. Contact Greg Knowler at greg.knowler@spglobal.com .

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