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

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

Feature image

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

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

Trucking News

Surface

FedEx Freight delays enforcement of LTL re-classification

<div class="phx-topic abstract-wrapper">Double counting for US port calls on the same voyage would lead to an “unsustainable” cost impact on the company, the CEO of its US affiliate tells the Journal of Commerce.</div>

Double counting for US port calls on the same voyage would lead to an “unsustainable” cost impact on the company, the CEO of its US affiliate tells the Journal of Commerce.

<div class="phx-topic">Italy’s Grimaldi Lines could be forced to stop calling at US ports on some of its trans-Atlantic services if it is charged double port fees for US calls, the head of its US affiliate says. Some of the vessels operating in Grimaldi’s trans-Atlantic Mediterranean service call initially at US East Coast ports, then continue to ports in Mexico before returning to US ports on the backhaul leg to the Mediterranean. “Should the same vessel be subject to double fees when entering the US on a voyage, the impact would be unsustainable, and some US calls would have to be dropped,” Andrew Abbott, CEO of Grimaldi’s North Atlantic operation, Atlantic Container Line (ACL), told the Journal of Commerce. ACL itself could face hefty tonnage charges if its vessels are considered roll-on/roll-off (ro/ro) vessels under the latest US Trade Representative (USTR) car carrier proposals, even though almost 90% of its cargoes are containers or breakbulk. “Will we be considered a ro/ro carrier, when only 10% of our volume are cars or other rollable cargo? If so, we would be hit with enormous charges per voyage because the current proposal is based on net registered tons and not cargo carried,” Abbott said. ACL’s weekly cargo volumes between January and May show 80%, equivalent to 29,908 tons, was carried in containers, with a further 9%, or 3,490 tons, as breakbulk. The remaining 10% comprised 9% rollable equipment and 620 cars. It would be “logical” for ACL to be considered a container line given “89% of our cargo is containers or flat rack cargo,” Abbott said. If this was accepted by the USTR, ACL would not face port fees. <h3>ACL has questioned USTR classifications </h3>Abbott raised Grimaldi’s potential withdrawal and whether it and ACL should be classified as container lines in a letter to Trade Representative Jamieson Greer during the public comment period <a href="https://www.joc.com/article/ustr-plan-to-tax-roro-ships-exceeds-statutory-authority-stakeholders-6039721">on the fee proposal that closed on July 7</a>. This came after USTR amended proposals in June to charge all foreign-built ro/ro vessels a tonnage fee every time they entered US ports, rather than on a vessel’s net registered tonnage. To blur the issue further, Abbott highlighted PIERS data between January and May that showed container lines carried 27% of the total vehicle volumes on the trans-Atlantic trade between the US East Coast and Northern Europe. By comparison, pure vehicle carriers carried 65% of overall volumes. PIERS is a sister product of the Journal of Commerce within S&amp;P Global. Under current USTR proposals, container lines would not pay port charges, even carrying cars in containers, so long as the vessels were not built in China or Chinese-owned. “A more practical solution would be to assess any charges on the cargo lifted, no matter what type of vessel is employed, instead of the total capacity of the vessel,” Abbott said. <h3>Unintended consequences </h3>Other ro/ro and vehicle carrier operators highlighted in their own submissions to the USTR that current proposals target all non-US-built ro/ro ships, whereas other vessel types, including container ships and tankers, are only penalized if they are China-built or -operated. This discrepancy led some groups and companies to question whether USTR exceeded its remit in including all foreign-built ro/ro and vehicle carriers in its investigation of China’s dominance in the maritime, logistics and shipbuilding industries. Abbott said he’d yet to receive a response from USTR. “We are waiting for the final verdict and are expecting to see something coming out in an executive order before the end of this month,” he said. ACL has an extensive trans-Atlantic network linking East Coast ports in the US and Canada including New York, Baltimore, Norfolk and Halifax with European ports such as Antwerp, Hamburg, Liverpool and Dublin that is separate from Grimaldi’s services. “Hopefully USTR will recognize its proposal will have a major impact on the competitiveness of individual carriers, unintentionally letting Chinese carriers off the hook, while penalizing carriers with either US headquarters or US-flag vessels,” Abbott said. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Italy’s Grimaldi Lines could be forced to stop calling at US ports on some of its trans-Atlantic services if it is charged double port fees for US calls, the head of its US affiliate says. Some of the vessels operating in Grimaldi’s trans-Atlantic Mediterranean service call initially at US East Coast ports, then continue to ports in Mexico before returning to US ports on the backhaul leg to the Mediterranean. “Should the same vessel be subject to double fees when entering the US on a voyage, the impact would be unsustainable, and some US calls would have to be dropped,” Andrew Abbott, CEO of Grimaldi’s North Atlantic operation, Atlantic Container Line (ACL), told the Journal of Commerce. ACL itself could face hefty tonnage charges if its vessels are considered roll-on/roll-off (ro/ro) vessels under the latest US Trade Representative (USTR) car carrier proposals, even though almost 90% of its cargoes are containers or breakbulk. “Will we be considered a ro/ro carrier, when only 10% of our volume are cars or other rollable cargo? If so, we would be hit with enormous charges per voyage because the current proposal is based on net registered tons and not cargo carried,” Abbott said. ACL’s weekly cargo volumes between January and May show 80%, equivalent to 29,908 tons, was carried in containers, with a further 9%, or 3,490 tons, as breakbulk. The remaining 10% comprised 9% rollable equipment and 620 cars. It would be “logical” for ACL to be considered a container line given “89% of our cargo is containers or flat rack cargo,” Abbott said. If this was accepted by the USTR, ACL would not face port fees. ACL has questioned USTR classifications Abbott raised Grimaldi’s potential withdrawal and whether it and ACL should be classified as container lines in a letter to Trade Representative Jamieson Greer during the public comment period on the fee proposal that closed on July 7 . This came after USTR amended proposals in June to charge all foreign-built ro/ro vessels a tonnage fee every time they entered US ports, rather than on a vessel’s net registered tonnage. To blur the issue further, Abbott highlighted PIERS data between January and May that showed container lines carried 27% of the total vehicle volumes on the trans-Atlantic trade between the US East Coast and Northern Europe. By comparison, pure vehicle carriers carried 65% of overall volumes. PIERS is a sister product of the Journal of Commerce within S&P Global. Under current USTR proposals, container lines would not pay port charges, even carrying cars in containers, so long as the vessels were not built in China or Chinese-owned. “A more practical solution would be to assess any charges on the cargo lifted, no matter what type of vessel is employed, instead of the total capacity of the vessel,” Abbott said. Unintended consequences Other ro/ro and vehicle carrier operators highlighted in their own submissions to the USTR that current proposals target all non-US-built ro/ro ships, whereas other vessel types, including container ships and tankers, are only penalized if they are China-built or -operated. This discrepancy led some groups and companies to question whether USTR exceeded its remit in including all foreign-built ro/ro and vehicle carriers in its investigation of China’s dominance in the maritime, logistics and shipbuilding industries. Abbott said he’d yet to receive a response from USTR. “We are waiting for the final verdict and are expecting to see something coming out in an executive order before the end of this month,” he said. ACL has an extensive trans-Atlantic network linking East Coast ports in the US and Canada including New York, Baltimore, Norfolk and Halifax with European ports such as Antwerp, Hamburg, Liverpool and Dublin that is separate from Grimaldi’s services. “Hopefully USTR will recognize its proposal will have a major impact on the competitiveness of individual carriers, unintentionally letting Chinese carriers off the hook, while penalizing carriers with either US headquarters or US-flag vessels,” Abbott said. Contact Keith Wallis at keithwallis@hotmail.com .

Maritime

Ro/ro cargo

USTR’s ‘double-hit’ port fee proposal could force cuts to Grimaldi’s US calls

<div class="phx-topic abstract-wrapper">Any investment by the largest trucking scale network in North America gives Truck Parking Club capital to expand its list of partner parking facilities. </div>

Any investment by the largest trucking scale network in North America gives Truck Parking Club capital to expand its list of partner parking facilities.

<div class="phx-topic">The connection between an available parking space for a truck driver and adequate capacity for truckload shippers may not seem immediately obvious. But the direct impact of drivers finding space to park at the most favorable time to fully use their hours of service is clear to a company aiming to build the largest collection of bookable space for truckload drivers in North America. “It’s been up to drivers to make decisions on where to park, and that often means they’re stopping with five hours left to drive,” said Reed Loustalot, chief marketing officer at Truck Parking Club, which offers a platform for fleets and drivers to arrange parking spaces. “That’s lost efficiency, and [if] you add that up across the industry, that’s a lot of wasted hours.” Loustalot said it’s hard to quantify that inefficiency across a nearly $1 billion industry. But arming drivers with the ability to book a space ahead of time in a way that lets them maximize their driving time definitely benefits shippers, carriers, brokers and the drivers, he said. “It’s worth it for the carrier to provide drivers with $25 for a space,” he said. “The alternative is they stop a few hours short [of their hours of service limit] and waste everyone’s time.” Truck Parking Club, founded in 2022 by CEO Evan Shelley, has been steadily building its network of available and bookable spaces through its app. From barely more than 1,000 spaces in November, the company now has 2,300 and plans to hit 10,000 by the end of 2026. Locations include space at trucking companies, truck repair shops, tow truck companies, storage companies, truck driving schools, trailer leasing companies, real estate investors, truck parking operators and truck stops. “Our north star is getting more locations,” Loustalot said. “Drivers just say they want more locations from us, so every dollar in the business is about getting more locations and better service.” Earlier this month, Truck Parking Club tied up an undisclosed investment from CAT Scale, North America’s largest truck weighing network. The investment provides Truck Parking Club with capital to add more parking spots to the assortment it can offer drivers. Shelley also said in a statement “leveraging [CAT Scale’s] knowledge and experience from building a trusted nationwide network will be invaluable as we continue building our truck parking network.” <h3>Broader reach to drivers </h3>Truck Parking Club last week also announced an integration with Platform Science, a widely used electronic logging device (ELD) hardware maker. That integration expands the distribution of Truck Parking Club’s app by making it available directly in-cab through the Platform Science device that drivers use for a range of functions. “We had fleets say to us, ‘let us know when you’re in Platform Science,’” Loustalot said. The cooperation is not exclusive, meaning Truck Parking Club can pursue integrations with other ELD providers and truckload telematics platforms. In May, Truck Parking Club began <a href="https://www.joc.com/article/truckload-technology-providers-partner-on-cargo-theft-initiative-5996628">partnering with GenLogs</a> to battle cargo and equipment theft by connecting Truck Parking Club’s data on commercial vehicles and their movements with GenLogs’ network of roadside sensors that track equipment location. Aside from aiming to drive more available capacity in the market, there’s a more direct link to shippers. Loustalot said the company has been seeing a “good amount of activity from private fleets, primarily using us for storage, and especially for trailers.” Those fleets tend to have drivers moving local loads or facility-to-facility shipments, “so parking isn’t the biggest issue, but trailers and drop trailer storage is an issue,” he said. “They use us as external yard.” As Truck Parking Club’s footprint grows, it begs the question: Why has there been no centralized parking platform before, and why do many fleets hand off the responsibility for finding, and paying for, parking to their drivers? “There are fleets that pay for their drivers to park,” Loustalot said. “But there are a million reasons they don’t want to do it. Most big fleets rent space, but cutting checks is another issue, and it takes a day to find a place to stash trucks. Folks have thrown their hands up, especially fleets that don’t have lots of real estate.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

The connection between an available parking space for a truck driver and adequate capacity for truckload shippers may not seem immediately obvious. But the direct impact of drivers finding space to park at the most favorable time to fully use their hours of service is clear to a company aiming to build the largest collection of bookable space for truckload drivers in North America. “It’s been up to drivers to make decisions on where to park, and that often means they’re stopping with five hours left to drive,” said Reed Loustalot, chief marketing officer at Truck Parking Club, which offers a platform for fleets and drivers to arrange parking spaces. “That’s lost efficiency, and [if] you add that up across the industry, that’s a lot of wasted hours.” Loustalot said it’s hard to quantify that inefficiency across a nearly $1 billion industry. But arming drivers with the ability to book a space ahead of time in a way that lets them maximize their driving time definitely benefits shippers, carriers, brokers and the drivers, he said. “It’s worth it for the carrier to provide drivers with $25 for a space,” he said. “The alternative is they stop a few hours short [of their hours of service limit] and waste everyone’s time.” Truck Parking Club, founded in 2022 by CEO Evan Shelley, has been steadily building its network of available and bookable spaces through its app. From barely more than 1,000 spaces in November, the company now has 2,300 and plans to hit 10,000 by the end of 2026. Locations include space at trucking companies, truck repair shops, tow truck companies, storage companies, truck driving schools, trailer leasing companies, real estate investors, truck parking operators and truck stops. “Our north star is getting more locations,” Loustalot said. “Drivers just say they want more locations from us, so every dollar in the business is about getting more locations and better service.” Earlier this month, Truck Parking Club tied up an undisclosed investment from CAT Scale, North America’s largest truck weighing network. The investment provides Truck Parking Club with capital to add more parking spots to the assortment it can offer drivers. Shelley also said in a statement “leveraging [CAT Scale’s] knowledge and experience from building a trusted nationwide network will be invaluable as we continue building our truck parking network.” Broader reach to drivers Truck Parking Club last week also announced an integration with Platform Science, a widely used electronic logging device (ELD) hardware maker. That integration expands the distribution of Truck Parking Club’s app by making it available directly in-cab through the Platform Science device that drivers use for a range of functions. “We had fleets say to us, ‘let us know when you’re in Platform Science,’” Loustalot said. The cooperation is not exclusive, meaning Truck Parking Club can pursue integrations with other ELD providers and truckload telematics platforms. In May, Truck Parking Club began partnering with GenLogs to battle cargo and equipment theft by connecting Truck Parking Club’s data on commercial vehicles and their movements with GenLogs’ network of roadside sensors that track equipment location. Aside from aiming to drive more available capacity in the market, there’s a more direct link to shippers. Loustalot said the company has been seeing a “good amount of activity from private fleets, primarily using us for storage, and especially for trailers.” Those fleets tend to have drivers moving local loads or facility-to-facility shipments, “so parking isn’t the biggest issue, but trailers and drop trailer storage is an issue,” he said. “They use us as external yard.” As Truck Parking Club’s footprint grows, it begs the question: Why has there been no centralized parking platform before, and why do many fleets hand off the responsibility for finding, and paying for, parking to their drivers? “There are fleets that pay for their drivers to park,” Loustalot said. “But there are a million reasons they don’t want to do it. Most big fleets rent space, but cutting checks is another issue, and it takes a day to find a place to stash trucks. Folks have thrown their hands up, especially fleets that don’t have lots of real estate.” Contact Eric Johnson at eric.johnson@spglobal.com .

Logistics Technology News

Parking platform uses business growth to target truckload fleet inefficiency

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

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

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

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

Rail News

North-American rail

Intermodal providers

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

<div class="phx-topic abstract-wrapper">MSC’s orders at two Chinese shipyards continue the carrier’s long association with Chinese shipbuilders, with the liner seemingly undeterred by US proposals to levy hefty port fees on Chinese-built ships. </div>

MSC’s orders at two Chinese shipyards continue the carrier’s long association with Chinese shipbuilders, with the liner seemingly undeterred by US proposals to levy hefty port fees on Chinese-built ships.

<div class="phx-topic">Three container lines, including Mediterranean Shipping Co. and Taiwan’s Yang Ming, are spending close to $4 billion on a raft of new ships to be built by Chinese and South Korean shipyards, carriers and shipyards have confirmed. The largest deals, which shipbrokers estimate at more than $1.7 billion combined, have been awarded by MSC for six 22,000-TEU liquefied natural gas-powered vessels. Four will be built by Shanghai Waigaoqiao Shipbuilding (SWS) and two by Hengli Heavy Industry in Dalian, China. The world’s largest container line has also upsized six LNG-fueled container ships ordered from SWS last year from 19,000 TEUs to 22,000 TEUs, the shipyard said. MSC’s orders at the two Chinese shipyards continue the carrier’s long association with Chinese shipbuilders, with the liner seemingly undeterred <a href="https://www.joc.com/article/revised-china-tonnage-tax-less-disruptive-still-costly-6005402">by US proposals to levy hefty port fees on Chinese-built ships</a>. They also take to about 30 the number of ships ordered by MSC at Chinese yards in the past year and increase MSC’s order backlog to 135 vessels totaling more than 2.3 million TEUs, according to the latest Alphaliner figures. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e01ed4f0-6075-42bf-a2f7-a63be815f7e0"></dynamic-object></div>Meanwhile, Yang Ming said it ordered seven 15,000-TEU dual-fuel container ships at a cost of up to $1.5 billion from South Korean shipyard Hanwha Ocean as part of its fleet renewal and expansion plan. The latest ships “will replace aging vessels and advance Yang Ming’s strategic development” when they are delivered in 2028 and 2029, the carrier said in a statement Thursday. The cost of each ship is between $194.8 million and $218.7 million, Yang Ming said in a filing to the Taiwan stock exchange. The vessels will be deployed on east-west routes alongside five LNG dual-fuel container ships ordered earlier and due for delivery beginning next year, the carrier said in its statement. Yang Ming said the LNG-fueled ships will achieve a 20% reduction in greenhouse gas emissions compared with traditional fuel. Continuing the ordering spree, South Korean intra-Asia operator Sinokor Merchant Marine has contracted Hyundai Heavy Industries to build four 13,000-TEU scrubber-fitted container ships at a total cost of $610 million for delivery between January and June 2028. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Three container lines, including Mediterranean Shipping Co. and Taiwan’s Yang Ming, are spending close to $4 billion on a raft of new ships to be built by Chinese and South Korean shipyards, carriers and shipyards have confirmed. The largest deals, which shipbrokers estimate at more than $1.7 billion combined, have been awarded by MSC for six 22,000-TEU liquefied natural gas-powered vessels. Four will be built by Shanghai Waigaoqiao Shipbuilding (SWS) and two by Hengli Heavy Industry in Dalian, China. The world’s largest container line has also upsized six LNG-fueled container ships ordered from SWS last year from 19,000 TEUs to 22,000 TEUs, the shipyard said. MSC’s orders at the two Chinese shipyards continue the carrier’s long association with Chinese shipbuilders, with the liner seemingly undeterred by US proposals to levy hefty port fees on Chinese-built ships . They also take to about 30 the number of ships ordered by MSC at Chinese yards in the past year and increase MSC’s order backlog to 135 vessels totaling more than 2.3 million TEUs, according to the latest Alphaliner figures. Meanwhile, Yang Ming said it ordered seven 15,000-TEU dual-fuel container ships at a cost of up to $1.5 billion from South Korean shipyard Hanwha Ocean as part of its fleet renewal and expansion plan. The latest ships “will replace aging vessels and advance Yang Ming’s strategic development” when they are delivered in 2028 and 2029, the carrier said in a statement Thursday. The cost of each ship is between $194.8 million and $218.7 million, Yang Ming said in a filing to the Taiwan stock exchange. The vessels will be deployed on east-west routes alongside five LNG dual-fuel container ships ordered earlier and due for delivery beginning next year, the carrier said in its statement. Yang Ming said the LNG-fueled ships will achieve a 20% reduction in greenhouse gas emissions compared with traditional fuel. Continuing the ordering spree, South Korean intra-Asia operator Sinokor Merchant Marine has contracted Hyundai Heavy Industries to build four 13,000-TEU scrubber-fitted container ships at a total cost of $610 million for delivery between January and June 2028. Contact Keith Wallis at keithwallis@hotmail.com .

Container Shipping News

Container lines

MSC, Yang Ming lead nearly $4 billion ordering spree for new vessels

<div class="phx-topic abstract-wrapper">US drayage truckers say costs and competition have been on the rise since the pandemic, while at the same time their pricing power is under downward pressure. </div>

US drayage truckers say costs and competition have been on the rise since the pandemic, while at the same time their pricing power is under downward pressure.

<div class="phx-topic">Drayage providers across the US say their survival is under increasing threat amid rising cost pressures driven by new competition, including technology-enabled platforms. To stay in business, operators are more often turning to mergers or acquisitions to bolster their companies in a bid to hold off competitors, market players told the Journal of Commerce. Drayage truckers say their costs have been rising since COVID-19, while at the same time their pricing power is under downward pressure. “We are in a situation where new entrants, brokers and AI [artificial intelligence] are in competition with us,” said Matt Schrap, CEO of the West Coast-based Harbor Trucking Association (HTA). “The lowest price wins.” Ken Kellaway, cofounder, chairman and president of RoadOne IntermodaLogistics, which has drayage operations across the country, said a price difference of as little as $50 among competitors will win the business. “The cost pressures are the largest I have seen in my career,” Kellaway said. Last week’s announcement <a href="https://www.ajot.com/insights/full/ai-gsc-shutdown-shocks-port-of-oakland-maritime-community">by Oakland-based drayage provider GSC Enterprises that it was shutting down its operations</a> has traditional operators wondering who is next. “It’s surprising that others haven’t fallen yet,” said Robert Loya, chief operating officer at TGS Logistics. <h3>Technology threat </h3>Traditional drayage companies in Los Angeles and Long Beach, many of whom have been operating for decades in the largest US port complex, are seeing market share erode as their contract-based customers seek lower prices from brokers, some of whom use tech-enabled platforms that allow freight interests to book freight directly with their competitors, Schrap said. RoadOne, based in the Northeast, sees the technology marketplace as the latest threat because it allows brokers to increase market share without investing in trucks, facilities or equipment. “Technology platforms position themselves as tech providers, but they’re really just brokers,” he said. “They’re taking market share as fast as they can. This is not sustainable [for traditional drayage providers].” But Michael Kroul, CEO of the truck broker KTI, said technology platforms are useful in that they help brokers see where the pricing market is in each region and where the freight opportunities are. He emphasized, though, that most brokers do not use the platforms as a tool to force rates lower at the expense of traditional drayage operators. “It’s not brokers who are causing rates to go down,” he said. “We’re not the lowest rate out there.” Kroul said the pricing pressure is due to the excess capacity that came into the drayage market during the post- COVID-19 boom when cargo volumes surged. “Everyone came into the market with COVID and many of them did not leave,” he said. Because drayage capacity exceeds demand, prices continue to trend lower while operating costs over the past three years have risen. “We see what costs operators are operating at, and it’s a tragedy,” Kroul said. Operating costs in California are rising faster than in many regions due to environmental rules that require the use of cleaner fuels, with the <a href="https://www.joc.com/article/new-clean-truck-rule-puts-california-dray-capacity-on-chopping-block-5221564">ultimate goal being to phase out the sale of diesel trucks by 2035</a>. New truck sales by then must be zero-emission heavy-duty trucks. Drayage operators are also affected by <a href="https://www.joc.com/article/la-lb-port-interests-spar-with-agency-over-emissions-rule-under-development-5223229">“indirect source rules”</a> under which drayage operators serving the ports and warehouses must contribute to overall reductions in emissions at those locations. “California’s drayage truckers continue to be subject to the most stringent environmental rules of any state in the country,” the California Trucking Association said in a statement. “A prolonged, challenging rate downturn combined with a crushing, unpredictable regulatory environment is endangering our members’ ability to keep cargo flowing at some of the nation’s largest and most important port complexes.” <h3>Smaller companies in danger </h3>In today’s drayage environment, both in California and nationally, smaller drayage companies are being bought out by operators with “larger bankrolls,” TGS Logistics’ Loya said. “The bigger ones are going to get bigger and the smaller ones are going to go away,” he said. “Those companies with fewer than 50 trucks are struggling.” Kellaway said brutal price competition in the industry is the root problem in drayage, and, unfortunately, bankruptcies may be the result. “If bankruptcies accelerate, then maybe customers will start to take note,” he said. Added HTA’s Schrap: “This race to the [pricing] bottom has to end.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

Drayage providers across the US say their survival is under increasing threat amid rising cost pressures driven by new competition, including technology-enabled platforms. To stay in business, operators are more often turning to mergers or acquisitions to bolster their companies in a bid to hold off competitors, market players told the Journal of Commerce. Drayage truckers say their costs have been rising since COVID-19, while at the same time their pricing power is under downward pressure. “We are in a situation where new entrants, brokers and AI [artificial intelligence] are in competition with us,” said Matt Schrap, CEO of the West Coast-based Harbor Trucking Association (HTA). “The lowest price wins.” Ken Kellaway, cofounder, chairman and president of RoadOne IntermodaLogistics, which has drayage operations across the country, said a price difference of as little as $50 among competitors will win the business. “The cost pressures are the largest I have seen in my career,” Kellaway said. Last week’s announcement by Oakland-based drayage provider GSC Enterprises that it was shutting down its operations has traditional operators wondering who is next. “It’s surprising that others haven’t fallen yet,” said Robert Loya, chief operating officer at TGS Logistics. Technology threat Traditional drayage companies in Los Angeles and Long Beach, many of whom have been operating for decades in the largest US port complex, are seeing market share erode as their contract-based customers seek lower prices from brokers, some of whom use tech-enabled platforms that allow freight interests to book freight directly with their competitors, Schrap said. RoadOne, based in the Northeast, sees the technology marketplace as the latest threat because it allows brokers to increase market share without investing in trucks, facilities or equipment. “Technology platforms position themselves as tech providers, but they’re really just brokers,” he said. “They’re taking market share as fast as they can. This is not sustainable [for traditional drayage providers].” But Michael Kroul, CEO of the truck broker KTI, said technology platforms are useful in that they help brokers see where the pricing market is in each region and where the freight opportunities are. He emphasized, though, that most brokers do not use the platforms as a tool to force rates lower at the expense of traditional drayage operators. “It’s not brokers who are causing rates to go down,” he said. “We’re not the lowest rate out there.” Kroul said the pricing pressure is due to the excess capacity that came into the drayage market during the post- COVID-19 boom when cargo volumes surged. “Everyone came into the market with COVID and many of them did not leave,” he said. Because drayage capacity exceeds demand, prices continue to trend lower while operating costs over the past three years have risen. “We see what costs operators are operating at, and it’s a tragedy,” Kroul said. Operating costs in California are rising faster than in many regions due to environmental rules that require the use of cleaner fuels, with the ultimate goal being to phase out the sale of diesel trucks by 2035 . New truck sales by then must be zero-emission heavy-duty trucks. Drayage operators are also affected by “indirect source rules” under which drayage operators serving the ports and warehouses must contribute to overall reductions in emissions at those locations. “California’s drayage truckers continue to be subject to the most stringent environmental rules of any state in the country,” the California Trucking Association said in a statement. “A prolonged, challenging rate downturn combined with a crushing, unpredictable regulatory environment is endangering our members’ ability to keep cargo flowing at some of the nation’s largest and most important port complexes.” Smaller companies in danger In today’s drayage environment, both in California and nationally, smaller drayage companies are being bought out by operators with “larger bankrolls,” TGS Logistics’ Loya said. “The bigger ones are going to get bigger and the smaller ones are going to go away,” he said. “Those companies with fewer than 50 trucks are struggling.” Kellaway said brutal price competition in the industry is the root problem in drayage, and, unfortunately, bankruptcies may be the result. “If bankruptcies accelerate, then maybe customers will start to take note,” he said. Added HTA’s Schrap: “This race to the [pricing] bottom has to end.” Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Drayage

Port News

Drayage stakeholders say industry under threat from falling rates, increased costs

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

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

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

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

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

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

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

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

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

Supply chain

Transport, Trade and Regulation News

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

Manzanillo

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

Lazaro Cardenas

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

Veracruz

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

Altamira

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

Ensenada

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

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

Import volumes through Mexico ports (SCT)

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

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

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

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

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

Trans-Pacific

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

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

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

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

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

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

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

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

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

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

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

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

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Shippers save money, time with automated transportation bidding tools

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

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Filling the Supply Chain Education Gap with LTL Education Courses

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<div class="phx-topic abstract-wrapper">The surcharges, which took effect Sunday, apply to select customers who exceed their peak-season allotment of containers out of the region. </div>

The surcharges, which took effect Sunday, apply to select customers who exceed their peak-season allotment of containers out of the region.

<div class="phx-topic">J.B. Hunt Transport Services, the largest US provider of domestic intermodal shipping, began assessing peak-season surcharges of up to $1,500 per container this week in Southern California. The surcharges, which took effect Sunday, apply to select customers who exceed their peak-season allotment of containers out of Southern California. The affected customers are companies whose freight volumes peak ahead of the holiday shopping season, indicating the surcharges are aimed at only some shippers. Spencer Frazier, executive vice president of sales and marketing for J.B. Hunt, said the surcharges are necessary for the company to remain agile and resilient enough to support shippers during busy times. “As [federal] trade policy negotiations continue, we are anticipating continued volatility and increasing demand from our customers,” Frazier told the Journal of Commerce in a statement. “To prepare and position capacity, we are engaging in customer discussions about anticipated peak season surcharges in July.” Still, a half-dozen shippers who spoke with the Journal of Commerce about the surcharges expressed frustration, questioning whether J.B. Hunt incurs $1,500 in costs to reposition empty containers to Southern California. They also pointed to tepid intermodal volume data published by the Association of American Railroads (AAR) and the US Surface Transportation Board (STB). “Starting a peak [surcharge] on July 13 is crazy and then they have it ending in December, even though J.B. Hunt told me it doesn’t expect peak [season] to last that long,” said one of the shippers, who did not want to be identified. “We tried to go back and negotiate. They said, ‘Look, if you’re going to give the freight to somebody else, that’s fine.’ I feel like J.B. Hunt rates were very cheap during the bids earlier this year and perhaps now they’re trying to make up for it.” The surcharges are not applied universally, but only after loads surpass a shipper’s weekly allotment. For example, if a shipper typically moves 100 containers out of Southern California via BNSF Railway per week, J.B. Hunt may allocate 120 containers as the peak-season allowance. BNSF is J.B. Hunt’s exclusive partner in the western US. The surcharge would apply only to shipments above the peak season threshold. This marks the <a href="https://www.joc.com/article/import-surge-pushing-los-angeles-outbound-spot-truck-rates-higher-5724894">second consecutive year</a> that J.B. Hunt has imposed surcharges exceeding $1,000 on customers who ramp up shipping between July and October. Last year, the company said the fees were necessary to manage market volatility while maintaining service standards, a rationale that likely underlies the latest surcharges. <h3>BNSF volume not spiking in recent weeks </h3>BNSF’s total intermodal volumes declined year over year for seven consecutive weeks from May through late June, but rose 5% for the week ended July 4, according to STB data. Data from RailState, which tracks volume in Southern California, shows BNSF’s volume gains came from international intermodal, while domestic intermodal volumes remained muted. It’s unlikely that volumes in the upcoming peak season will exceed that of a year ago across all North American Class I railroads, according to a Journal of Commerce analysis of data from the Intermodal Association of North America (IANA). Meanwhile, ocean carriers have backed away from proposed spot rate increases, which matters because volumes moving through the ports of Los Angeles and Long Beach feed both international and domestic intermodal flows in Southern California. Spot market ocean rates to the West Coast have <a href="https://www.joc.com/article/container-lines-cutting-trans-pacific-capacity-overhang-6040426">declined steadily</a> since peaking in early June, due in part to soft demand. Many retailers accelerated shipments to avoid possible tariff increases under the Trump administration. J.B. Hunt’s decision to implement a peak season surcharge could push its competitors, such as Hub Group, Schneider National, STG Logistics and Swift Intermodal, to impose similar, if smaller, surcharges. Union Pacific Railroad may also implement a small surcharge for using rail-owned equipment in Southern California, if only to prevent too much volume shifting from J.B. Hunt and BNSF to UP. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

J.B. Hunt Transport Services, the largest US provider of domestic intermodal shipping, began assessing peak-season surcharges of up to $1,500 per container this week in Southern California. The surcharges, which took effect Sunday, apply to select customers who exceed their peak-season allotment of containers out of Southern California. The affected customers are companies whose freight volumes peak ahead of the holiday shopping season, indicating the surcharges are aimed at only some shippers. Spencer Frazier, executive vice president of sales and marketing for J.B. Hunt, said the surcharges are necessary for the company to remain agile and resilient enough to support shippers during busy times. “As [federal] trade policy negotiations continue, we are anticipating continued volatility and increasing demand from our customers,” Frazier told the Journal of Commerce in a statement. “To prepare and position capacity, we are engaging in customer discussions about anticipated peak season surcharges in July.” Still, a half-dozen shippers who spoke with the Journal of Commerce about the surcharges expressed frustration, questioning whether J.B. Hunt incurs $1,500 in costs to reposition empty containers to Southern California. They also pointed to tepid intermodal volume data published by the Association of American Railroads (AAR) and the US Surface Transportation Board (STB). “Starting a peak [surcharge] on July 13 is crazy and then they have it ending in December, even though J.B. Hunt told me it doesn’t expect peak [season] to last that long,” said one of the shippers, who did not want to be identified. “We tried to go back and negotiate. They said, ‘Look, if you’re going to give the freight to somebody else, that’s fine.’ I feel like J.B. Hunt rates were very cheap during the bids earlier this year and perhaps now they’re trying to make up for it.” The surcharges are not applied universally, but only after loads surpass a shipper’s weekly allotment. For example, if a shipper typically moves 100 containers out of Southern California via BNSF Railway per week, J.B. Hunt may allocate 120 containers as the peak-season allowance. BNSF is J.B. Hunt’s exclusive partner in the western US. The surcharge would apply only to shipments above the peak season threshold. This marks the second consecutive year that J.B. Hunt has imposed surcharges exceeding $1,000 on customers who ramp up shipping between July and October. Last year, the company said the fees were necessary to manage market volatility while maintaining service standards, a rationale that likely underlies the latest surcharges. BNSF volume not spiking in recent weeks BNSF’s total intermodal volumes declined year over year for seven consecutive weeks from May through late June, but rose 5% for the week ended July 4, according to STB data. Data from RailState, which tracks volume in Southern California, shows BNSF’s volume gains came from international intermodal, while domestic intermodal volumes remained muted. It’s unlikely that volumes in the upcoming peak season will exceed that of a year ago across all North American Class I railroads, according to a Journal of Commerce analysis of data from the Intermodal Association of North America (IANA). Meanwhile, ocean carriers have backed away from proposed spot rate increases, which matters because volumes moving through the ports of Los Angeles and Long Beach feed both international and domestic intermodal flows in Southern California. Spot market ocean rates to the West Coast have declined steadily since peaking in early June, due in part to soft demand. Many retailers accelerated shipments to avoid possible tariff increases under the Trump administration. J.B. Hunt’s decision to implement a peak season surcharge could push its competitors, such as Hub Group, Schneider National, STG Logistics and Swift Intermodal, to impose similar, if smaller, surcharges. Union Pacific Railroad may also implement a small surcharge for using rail-owned equipment in Southern California, if only to prevent too much volume shifting from J.B. Hunt and BNSF to UP. Contact Ari Ashe at ari.ashe@spglobal.com .

J.B. Hunt hits some shippers with big surcharges in Southern California

<div class="phx-topic abstract-wrapper">The National Association of Waterfront Employers has sent a letter to the Senate Appropriations Committee asking for continued support of the $3 billion Clean Ports Program.</div>

The National Association of Waterfront Employers has sent a letter to the Senate Appropriations Committee asking for continued support of the $3 billion Clean Ports Program.

<div class="phx-topic">US ports are worried that potential cuts to the Environmental Protection Agency’s (EPA’s) 2026 budget will make it more difficult to phase out diesel-powered yard equipment and are urging Congress to maintain grant programs meant to reduce carbon emissions from their operations. The National Association of Waterfront Employers (NAWE) sent a letter to the Senate Appropriations Committee on Monday asking for continued support of the Clean Ports Program, a $3 billion grant program funded under the 2022 Inflation Reduction Act. NAWE President Carl Bentzel said in the letter the grants help US ports invest in newer, more efficient yard equipment and allow them to handle more volumes in limited space. “Ports are facing increasing demand and growing global competition while trying to operate with aging cargo-handling equipment, limited funding for capital improvement, and limitations on space for capital expansion,” Bentzel said. He added that US manufacturers benefit from more investments in clean ports projects, furthering the Trump administration’s agenda of boosting domestic industries. “Many of the Clean Port projects are reliant on US manufacturing of cargo handling equipment,” Bentzel wrote. “This equipment is not only driving a vital US manufacturing sector but will be a foundational industry for the revitalization of the US maritime industrial base.” <h3>EPA faces cuts </h3>The letter arrives as Congress takes up spending proposals that will likely include steep cuts to the EPA, which administers the Clean Ports Program. In May, EPA Administrator Lee Zeldin proposed a $4.2 billion budget for his agency for the next fiscal year, about half of what it received for 2025. House Republicans are working on a bill that would provide about $7 billion for the EPA, a 23% cut from 2025 spending. The Clean Ports Program awarded 54 grants in 2024. Almost all of the program’s grant funding went toward zero-emission port equipment, with a smaller portion funding other initiatives such as developing plans to reduce emissions. The Port Authority of New York and New Jersey <a href="https://www.joc.com/article/us-ports-plan-upgrades-to-electric-yard-equipment-after-securing-epa-grants-5782145">received the largest single grant</a>, $451 million, to replace diesel-powered yard equipment. The Port of Los Angeles received the second-largest award at $411 million. The long lead times for ordering and purchasing new yard equipment mean the grant monies have only trickled out. Of the $2.9 billion in grant awards, about $417,000 has been spent so far, according to USASpending.gov. Although there has not been any push for a rescission of the awards, which are already obligated by Congress, NAWE’s letter said the grant funding should “be spent as expeditiously as possible so that these important projects can move forward and have the intended impact on making the supply chain more efficient and safer.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

US ports are worried that potential cuts to the Environmental Protection Agency’s (EPA’s) 2026 budget will make it more difficult to phase out diesel-powered yard equipment and are urging Congress to maintain grant programs meant to reduce carbon emissions from their operations. The National Association of Waterfront Employers (NAWE) sent a letter to the Senate Appropriations Committee on Monday asking for continued support of the Clean Ports Program, a $3 billion grant program funded under the 2022 Inflation Reduction Act. NAWE President Carl Bentzel said in the letter the grants help US ports invest in newer, more efficient yard equipment and allow them to handle more volumes in limited space. “Ports are facing increasing demand and growing global competition while trying to operate with aging cargo-handling equipment, limited funding for capital improvement, and limitations on space for capital expansion,” Bentzel said. He added that US manufacturers benefit from more investments in clean ports projects, furthering the Trump administration’s agenda of boosting domestic industries. “Many of the Clean Port projects are reliant on US manufacturing of cargo handling equipment,” Bentzel wrote. “This equipment is not only driving a vital US manufacturing sector but will be a foundational industry for the revitalization of the US maritime industrial base.” EPA faces cuts The letter arrives as Congress takes up spending proposals that will likely include steep cuts to the EPA, which administers the Clean Ports Program. In May, EPA Administrator Lee Zeldin proposed a $4.2 billion budget for his agency for the next fiscal year, about half of what it received for 2025. House Republicans are working on a bill that would provide about $7 billion for the EPA, a 23% cut from 2025 spending. The Clean Ports Program awarded 54 grants in 2024. Almost all of the program’s grant funding went toward zero-emission port equipment, with a smaller portion funding other initiatives such as developing plans to reduce emissions. The Port Authority of New York and New Jersey received the largest single grant , $451 million, to replace diesel-powered yard equipment. The Port of Los Angeles received the second-largest award at $411 million. The long lead times for ordering and purchasing new yard equipment mean the grant monies have only trickled out. Of the $2.9 billion in grant awards, about $417,000 has been spent so far, according to USASpending.gov. Although there has not been any push for a rescission of the awards, which are already obligated by Congress, NAWE’s letter said the grant funding should “be spent as expeditiously as possible so that these important projects can move forward and have the intended impact on making the supply chain more efficient and safer.” Contact Michael Angell at michael.angell@spglobal.com .

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