<div class="phx-topic abstract-wrapper">Jim Vena blamed the delay on a contractor that must revise material that will be included in what will be a roughly 4,000-page filing to federal regulators.</div>

Jim Vena blamed the delay on a contractor that must revise material that will be included in what will be a roughly 4,000-page filing to federal regulators.

Feature image

<div class="phx-topic">Union Pacific Railroad said Tuesday it will delay by two more weeks the filing of its application with the US Surface Transportation Board requesting formal approval for its proposed $85 billion acquisition of Norfolk Southern Railway. UP CEO Jim Vena blamed the delay on a contractor that must revise material that will be included in what will be a roughly 4,000-page filing to federal regulators. The railroad had previously said it was targeting the first week of December to submit the formal application to STB. “I was hoping [to file] at the end of this week [and] then we had one contractor that needed to do some re-work on some product,” Vena said at the UBS Global Industrials and Transportation Conference. “Am I happy? No…[But] we want to make sure that the final [submission] is at a level that is exceptional.” Railroads often hire outside firms during complicated merger processes to provide economic analysis, financial modeling, and projections on questions such as how many trucks would be taken off highways. Consultants are also paid to field questions about their calculations during the application process. S&amp;P Global, the parent company of the Journal of Commerce, was among the firms hired to provide analysis during Canadian Pacific’s acquisition of Kansas City Southern Railway, which was finalized in 2023. Although the UP delay is minor, it likely eliminates any chance of a decision from STB before the end of 2026. More realistically, a ruling is now expected in the first half of 2027. Regulators for the first time will be applying stricter rules enacted more than two decades ago to guide a deal of this size because the transaction qualifies as a “major” merger. The STB requires not only that Union Pacific and Norfolk Southern show that the deal will not reduce competition, but that it will actually enhance competition — i.e. that the combined railroad must improve the competitive landscape in the US. <h3>Competition heating up against UP </h3>Meanwhile, pressure around UP’s application is building as more companies weigh in on the proposed transaction. CPKC CEO Keith Creel, speaking Tuesday at the same UBS conference as Vena, had sharp words for the deal. Creel said that while he does not “lose any sleep” over whether the deal is approved or rejected, he believes further consolidation of the industry leaves the supply chain more vulnerable. He compared the rail landscape to four airlines serving Chicago’s O’Hare and Midway airports — American Airlines, Delta Air Lines, Southwest Airlines and United Airlines. “Think about a world where there's only two railroads or two airlines. If there was only United and Delta, do you think they'd be operating Midway and be operating O'Hare?” Creel said. “The likelihood is they go to O'Hare because that's the workhorse. And then if O'Hare breaks, what do you do? You've got a nation that's in gridlock. It's the same for the railroad." Creel acknowledged there is minimal overlap between CPKC and a combined UP–NS, noting that only about 5% of CPKC’s volume touches Norfolk Southern. Even so, he said CPKC will seek concessions from Union Pacific during the application process to demonstrate a pro-competition posture. Those concessions, Creel said, would include better access around Houston, which is critical for CPKC’s Mexico Midwest Express intermodal service to Chicago but depends on a stretch of track owned by Union Pacific. “What I’m going to ask for is a means to ensure that anticompetitive behavior is held at bay,” Creel said. “I know Jim [Vena]. I trust Jim, but Jim is not going to be [at Union Pacific] forever. But this decision is forever.” BNSF Railway last Friday filed a petition with the STB calling for an immediate investigation into whether Union Pacific has exhibited a pattern of anticompetitive and harmful conduct since Union Pacific and Southern Pacific merged in 1996. If the STB agreed to review the implementation of merger conditions issued nearly 30 years ago before ruling on the UP–NS merger, it would almost certainly delay the approval process. How long that might take is unclear, because there is no direct precedent. On Monday, the National Association of Waterfront Employers (NAWE) <a href="https://www.joc.com/article/ports-urge-strict-review-of-intermodal-impacts-from-up-ns-merger-6126527">sent a letter</a> to the STB expressing serious concerns about the impact of the UP-NS deal on international intermodal and on-dock rail in US ports. NAWE, whose members represent more than 90% of US marine terminal operators, warned that consolidation could reduce on-dock rail options and result in fewer choices for international intermodal flows into the US interior. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a></div>

Union Pacific Railroad said Tuesday it will delay by two more weeks the filing of its application with the US Surface Transportation Board requesting formal approval for its proposed $85 billion acquisition of Norfolk Southern Railway. UP CEO Jim Vena blamed the delay on a contractor that must revise material that will be included in what will be a roughly 4,000-page filing to federal regulators. The railroad had previously said it was targeting the first week of December to submit the formal application to STB. “I was hoping [to file] at the end of this week [and] then we had one contractor that needed to do some re-work on some product,” Vena said at the UBS Global Industrials and Transportation Conference. “Am I happy? No…[But] we want to make sure that the final [submission] is at a level that is exceptional.” Railroads often hire outside firms during complicated merger processes to provide economic analysis, financial modeling, and projections on questions such as how many trucks would be taken off highways. Consultants are also paid to field questions about their calculations during the application process. S&P Global, the parent company of the Journal of Commerce, was among the firms hired to provide analysis during Canadian Pacific’s acquisition of Kansas City Southern Railway, which was finalized in 2023. Although the UP delay is minor, it likely eliminates any chance of a decision from STB before the end of 2026. More realistically, a ruling is now expected in the first half of 2027. Regulators for the first time will be applying stricter rules enacted more than two decades ago to guide a deal of this size because the transaction qualifies as a “major” merger. The STB requires not only that Union Pacific and Norfolk Southern show that the deal will not reduce competition, but that it will actually enhance competition — i.e. that the combined railroad must improve the competitive landscape in the US. Competition heating up against UP Meanwhile, pressure around UP’s application is building as more companies weigh in on the proposed transaction. CPKC CEO Keith Creel, speaking Tuesday at the same UBS conference as Vena, had sharp words for the deal. Creel said that while he does not “lose any sleep” over whether the deal is approved or rejected, he believes further consolidation of the industry leaves the supply chain more vulnerable. He compared the rail landscape to four airlines serving Chicago’s O’Hare and Midway airports — American Airlines, Delta Air Lines, Southwest Airlines and United Airlines. “Think about a world where there's only two railroads or two airlines. If there was only United and Delta, do you think they'd be operating Midway and be operating O'Hare?” Creel said. “The likelihood is they go to O'Hare because that's the workhorse. And then if O'Hare breaks, what do you do? You've got a nation that's in gridlock. It's the same for the railroad." Creel acknowledged there is minimal overlap between CPKC and a combined UP–NS, noting that only about 5% of CPKC’s volume touches Norfolk Southern. Even so, he said CPKC will seek concessions from Union Pacific during the application process to demonstrate a pro-competition posture. Those concessions, Creel said, would include better access around Houston, which is critical for CPKC’s Mexico Midwest Express intermodal service to Chicago but depends on a stretch of track owned by Union Pacific. “What I’m going to ask for is a means to ensure that anticompetitive behavior is held at bay,” Creel said. “I know Jim [Vena]. I trust Jim, but Jim is not going to be [at Union Pacific] forever. But this decision is forever.” BNSF Railway last Friday filed a petition with the STB calling for an immediate investigation into whether Union Pacific has exhibited a pattern of anticompetitive and harmful conduct since Union Pacific and Southern Pacific merged in 1996. If the STB agreed to review the implementation of merger conditions issued nearly 30 years ago before ruling on the UP–NS merger, it would almost certainly delay the approval process. How long that might take is unclear, because there is no direct precedent. On Monday, the National Association of Waterfront Employers (NAWE) sent a letter to the STB expressing serious concerns about the impact of the UP-NS deal on international intermodal and on-dock rail in US ports. NAWE, whose members represent more than 90% of US marine terminal operators, warned that consolidation could reduce on-dock rail options and result in fewer choices for international intermodal flows into the US interior. Contact Ari Ashe at ari.ashe@spglobal.com

Rail News

North-American rail

UP CEO says NS merger filing with US regulators to be delayed two weeks

<div class="phx-topic abstract-wrapper">Ocean Network Express said the East Coast 2 service jointly operated with HMM and Yang Ming will call Cai Mep on eastbound rotations, while dropping a call at China’s Port of Xiamen.</div>

Ocean Network Express said the East Coast 2 service jointly operated with HMM and Yang Ming will call Cai Mep on eastbound rotations, while dropping a call at China’s Port of Xiamen.

<div class="phx-topic">The Premier Alliance is adding port calls in Vietnam and Halifax to its mainline service between China and the US East Coast, part of the reshuffling of vessel services stemming from new trade flows out of Asia. Ocean Network Express (ONE) said Monday that <a href="https://www.joc.com/article/premier-alliance-enhances-network-ahead-of-february-launch-5751123">the East Coast 2 (EC2) service jointly operated with HMM and Yang Ming</a> will call the Port of Cai Mep in Vietnam on eastbound rotations, dropping a call at China’s Port of Xiamen. The first call at Cai Mep will be the Dec. 22 departure of the 13,154-TEU HMM Victory. The EC2 will also start routing via the Cape of Good Hope in southern Africa instead of returning to Asia via the Panama Canal. Its outbound rotation will now make its last North American call at Halifax in eastern Canada, with a call to Singapore also added to the return voyage. The new rotation takes effect with the Dec. 10 departure of the 10,055-TEU Hyundai Pluto from Halifax. To accommodate the new rotation, the Premier Alliance will adjust westbound voyages of the EC1 service to include calls at Manzanillo in Mexico and South Korea’s Busan that were dropped from the EC2. Premier Alliance’s EC3 service out of Southeast Asia will also drop a second call at Halifax as part of its North American rotation. Along with the EC3’s existing service from Cai Mep, the additional call reflects the growing trade between Vietnam and the US. Through August, Vietnamese exports to the US this year totaled $122.6 billion, according to the US Census Bureau, a 43% increase from the year-earlier period. Containerized exports to the US from Cai Mep, part of the broader Vung Tau port system in southern Vietnam, reached 35,400 TEUs in the third quarter of 2025, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global, a 20% increase from 2024. Containerized exports from Xiamen to the US reached 194,895 TEUs in the third quarter, according to PIERS. While that is a rebound from the second quarter’s 158,916 TEUs, it is 15% lower than the third quarter of 2024. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The Premier Alliance is adding port calls in Vietnam and Halifax to its mainline service between China and the US East Coast, part of the reshuffling of vessel services stemming from new trade flows out of Asia. Ocean Network Express (ONE) said Monday that the East Coast 2 (EC2) service jointly operated with HMM and Yang Ming will call the Port of Cai Mep in Vietnam on eastbound rotations, dropping a call at China’s Port of Xiamen. The first call at Cai Mep will be the Dec. 22 departure of the 13,154-TEU HMM Victory. The EC2 will also start routing via the Cape of Good Hope in southern Africa instead of returning to Asia via the Panama Canal. Its outbound rotation will now make its last North American call at Halifax in eastern Canada, with a call to Singapore also added to the return voyage. The new rotation takes effect with the Dec. 10 departure of the 10,055-TEU Hyundai Pluto from Halifax. To accommodate the new rotation, the Premier Alliance will adjust westbound voyages of the EC1 service to include calls at Manzanillo in Mexico and South Korea’s Busan that were dropped from the EC2. Premier Alliance’s EC3 service out of Southeast Asia will also drop a second call at Halifax as part of its North American rotation. Along with the EC3’s existing service from Cai Mep, the additional call reflects the growing trade between Vietnam and the US. Through August, Vietnamese exports to the US this year totaled $122.6 billion, according to the US Census Bureau, a 43% increase from the year-earlier period. Containerized exports to the US from Cai Mep, part of the broader Vung Tau port system in southern Vietnam, reached 35,400 TEUs in the third quarter of 2025, according to PIERS, a sister product of the Journal of Commerce within S&P Global, a 20% increase from 2024. Containerized exports from Xiamen to the US reached 194,895 TEUs in the third quarter, according to PIERS. While that is a rebound from the second quarter’s 158,916 TEUs, it is 15% lower than the third quarter of 2024. Contact Michael Angell at michael.angell@spglobal.com .

Container lines

Trans-Pacific

Container Shipping News

Maritime

Premier Alliance adds Cai Mep call amid US import surge from Vietnam

<div class="phx-topic abstract-wrapper">As key global manufacturers of high and heavy cargo, Caterpillar and Deere are considered performance indicators for the roll-on/roll-off breakbulk shipping segment. </div>

As key global manufacturers of high and heavy cargo, Caterpillar and Deere are considered performance indicators for the roll-on/roll-off breakbulk shipping segment.

<div class="phx-topic">Caterpillar and Deere are bracing for another hit from US import tariffs in 2026, but the two heavy equipment makers are also looking to the data center boom and other large-scale construction projects as opportunities to drive up business. As key global manufacturers of high and heavy cargo, Caterpillar and Deere are considered performance indicators for the roll-on/roll-off (ro/ro) breakbulk shipping segment. Both US-based companies rely on imported materials and parts, even though they produce and source much of their equipment domestically. Illinois-based Deere &amp; Company, which produces heavy equipment for farming and construction, is forecasting further declines in income for 2026 after tariffs and a challenging agriculture market took a toll on performance this year. Deere anticipates a direct tariff expense of $1.2 billion for 2026 — approximately doubling the $600 million in tariff costs the company took on in 2025, according to its full-year earnings report issued Nov. 26. Deere’s tariff costs have amounted to about $300 million each quarter, and that rate is expected to continue in 2026, Investor Relations Director Josh Beal said during the company’s earnings call. “If you look at our price-cost expectation for 2026, inclusive of tariffs in that number, we expect to be price-cost positive.” he said. “We’ll start to capture back.” Deere lowered its 2026 income projections to a range of $4 billion to $4.8 billion after net income for the 2025 fiscal year fell $29% to $5 billion. Fourth-quarter net income dropped 14% to $1.1 billion compared with a year ago. “Looking ahead, we believe 2026 will mark the bottom of the large ag cycle,” CEO John May said in the company’s earnings statement. Deere executives pointed to indications of market stabilization, as well as optimism in other segments and geographies. “While ongoing margin pressures from tariffs and persistent challenges in the large ag sector remain, our commitment to inventory management and cost control — coupled with expected growth in small agriculture and turf and construction and forestry — positions us to effectively manage the business and seize emerging opportunities as market conditions begin to recover,” May said. Deere came out ahead of its revenue projections for the year, with annual revenues up 11% to $12.4 billion, above the company’s previous estimate of $9.8 billion. Higher shipment volumes drove up year-over-year sales in Deere’s construction and forestry equipment segment in the fourth quarter, up 27% to $3.4 billion. Chris Seibert, investor communications manager for Deere, said US government infrastructure spending continues to bolster the industry. “Additionally, declining interest rates, increasing investments in rental fleets and surging datacenter construction starts are also providing support,” Seibert said in the earnings call. <h3>Caterpillar sizes up power gen </h3>Caterpillar expects to close out 2025 with “modestly higher” sales than last year resulting from rising equipment demands for AI data centers, even as the company anticipates higher tariff expenses than previously projected, according to Caterpillar’s third-quarter earnings results. “We expect strong growth in full-year sales for power generation compared to last year,” Caterpillar COO Joseph Creed said during the company’s third-quarter earnings call. “Demand remains robust, driven by data center growth related to cloud computing and generative AI.” The company’s order backlog reached a record $39.8 billion, while sales and revenue grew 10% to $17.6 billion in the most recent quarter. The biggest gains came from the company’s power generation segment, with a 33% increase driven primarily by demand for reciprocating engines for data centers. Caterpillar is planning a $725 million expansion of its large-engine facility in Lafayette, Indiana, to increase production of power generators. Tariffs took a toll across all business segments for Caterpillar, which produces construction and mining equipment, as well as diesel- and gas-powered turbines and engines. Caterpillar raised its tariff impact estimates to a range of $1.6 billion to $1.75 billion for 2025, up from previous projections of $1.3 billion to $1.5 billion. “Our team is continuously evaluating options to further reduce the impact of tariffs going forward, and we fully intend to implement longer-term actions once there’s sufficient certainty,” Creed said. Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>. </div>

Caterpillar and Deere are bracing for another hit from US import tariffs in 2026, but the two heavy equipment makers are also looking to the data center boom and other large-scale construction projects as opportunities to drive up business. As key global manufacturers of high and heavy cargo, Caterpillar and Deere are considered performance indicators for the roll-on/roll-off (ro/ro) breakbulk shipping segment. Both US-based companies rely on imported materials and parts, even though they produce and source much of their equipment domestically. Illinois-based Deere & Company, which produces heavy equipment for farming and construction, is forecasting further declines in income for 2026 after tariffs and a challenging agriculture market took a toll on performance this year. Deere anticipates a direct tariff expense of $1.2 billion for 2026 — approximately doubling the $600 million in tariff costs the company took on in 2025, according to its full-year earnings report issued Nov. 26. Deere’s tariff costs have amounted to about $300 million each quarter, and that rate is expected to continue in 2026, Investor Relations Director Josh Beal said during the company’s earnings call. “If you look at our price-cost expectation for 2026, inclusive of tariffs in that number, we expect to be price-cost positive.” he said. “We’ll start to capture back.” Deere lowered its 2026 income projections to a range of $4 billion to $4.8 billion after net income for the 2025 fiscal year fell $29% to $5 billion. Fourth-quarter net income dropped 14% to $1.1 billion compared with a year ago. “Looking ahead, we believe 2026 will mark the bottom of the large ag cycle,” CEO John May said in the company’s earnings statement. Deere executives pointed to indications of market stabilization, as well as optimism in other segments and geographies. “While ongoing margin pressures from tariffs and persistent challenges in the large ag sector remain, our commitment to inventory management and cost control — coupled with expected growth in small agriculture and turf and construction and forestry — positions us to effectively manage the business and seize emerging opportunities as market conditions begin to recover,” May said. Deere came out ahead of its revenue projections for the year, with annual revenues up 11% to $12.4 billion, above the company’s previous estimate of $9.8 billion. Higher shipment volumes drove up year-over-year sales in Deere’s construction and forestry equipment segment in the fourth quarter, up 27% to $3.4 billion. Chris Seibert, investor communications manager for Deere, said US government infrastructure spending continues to bolster the industry. “Additionally, declining interest rates, increasing investments in rental fleets and surging datacenter construction starts are also providing support,” Seibert said in the earnings call. Caterpillar sizes up power gen Caterpillar expects to close out 2025 with “modestly higher” sales than last year resulting from rising equipment demands for AI data centers, even as the company anticipates higher tariff expenses than previously projected, according to Caterpillar’s third-quarter earnings results. “We expect strong growth in full-year sales for power generation compared to last year,” Caterpillar COO Joseph Creed said during the company’s third-quarter earnings call. “Demand remains robust, driven by data center growth related to cloud computing and generative AI.” The company’s order backlog reached a record $39.8 billion, while sales and revenue grew 10% to $17.6 billion in the most recent quarter. The biggest gains came from the company’s power generation segment, with a 33% increase driven primarily by demand for reciprocating engines for data centers. Caterpillar is planning a $725 million expansion of its large-engine facility in Lafayette, Indiana, to increase production of power generators. Tariffs took a toll across all business segments for Caterpillar, which produces construction and mining equipment, as well as diesel- and gas-powered turbines and engines. Caterpillar raised its tariff impact estimates to a range of $1.6 billion to $1.75 billion for 2025, up from previous projections of $1.3 billion to $1.5 billion. “Our team is continuously evaluating options to further reduce the impact of tariffs going forward, and we fully intend to implement longer-term actions once there’s sufficient certainty,” Creed said. Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Ro/ro cargo

Breakbulk News

Tariff costs, data center demand create mixed outlook for ro/ro shippers in 2026

<div class="phx-topic abstract-wrapper">The Digital Container Shipping Association’s partnership program has grown in the last month, with the global home furnishings retailer following last week’s addition of European vessel operator Unifeeder.</div>

The Digital Container Shipping Association’s partnership program has grown in the last month, with the global home furnishings retailer following last week’s addition of European vessel operator Unifeeder.

<div class="phx-topic">IKEA on Tuesday joined the Digital Container Shipping Association’s (DCSA’s) partnership program, becoming the first shipper added to a growing list of carriers, forwarders, terminals, feeders and technology providers involved in the program. In joining the DCSA+ program, IKEA Supply AG, which is responsible for the flow of IKEA products from suppliers to franchisees worldwide, said it is aiming to ship more sustainably and predictably by advancing the digital standards that DCSA has developed for its members and other industry participants. “By joining DCSA+, we can help create digital solutions that make it easier for everyone involved to share information, improve transparency, and in the end deliver better shopping experiences for IKEA customers around the world by making sure our products are available where and when they need them at an affordable price,” Ewelina Taylor, global transport manager at Inter IKEA Group, said in a statement. IKEA joins Unifeeder, Europe’s largest shortsea and feeder operator and part of DP World, as <a href="https://www.joc.com/article/unifeeder-adds-scale-to-dcsas-partnership-program-6123850">recent entrants to the DCSA+ program</a>, which has more than a dozen participants, including logistics software vendors WNS and Vinturas, the Port of Valencia and Lufthansa Industry Solutions. Adding a shipper to its ecosystem is an important step for DCSA, which for years has been encouraging shippers to press their ocean carrier and 3PL partners to adopt the standards the consortium has developed around cargo tracking, electronic bills of lading, just-in-time port calls, schedules and more. “Having a global category leader engage directly in this work validates the relevance of the DCSA+ model and strengthens collaboration between cargo owners and carriers as we move toward consistent digital practices across the industry,” Mariana Bock-Losada, chief growth officer at DCSA, said in the statement. DCSA last month launched an <a href="https://www.joc.com/article/dcsa-broadens-reach-with-identity-exchange-for-shipping-industry-6119020">identity exchange tool</a> for companies in the logistics industry to manage internal compliance checks, its first such product. The ocean carrier members of DCSA are Mediterranean Shipping Co., Hapag-Lloyd, Maersk, CMA CGM, Evergreen, HMM, Yang Ming, Zim Integrated Shipping Services and PIL. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

IKEA on Tuesday joined the Digital Container Shipping Association’s (DCSA’s) partnership program, becoming the first shipper added to a growing list of carriers, forwarders, terminals, feeders and technology providers involved in the program. In joining the DCSA+ program, IKEA Supply AG, which is responsible for the flow of IKEA products from suppliers to franchisees worldwide, said it is aiming to ship more sustainably and predictably by advancing the digital standards that DCSA has developed for its members and other industry participants. “By joining DCSA+, we can help create digital solutions that make it easier for everyone involved to share information, improve transparency, and in the end deliver better shopping experiences for IKEA customers around the world by making sure our products are available where and when they need them at an affordable price,” Ewelina Taylor, global transport manager at Inter IKEA Group, said in a statement. IKEA joins Unifeeder, Europe’s largest shortsea and feeder operator and part of DP World, as recent entrants to the DCSA+ program , which has more than a dozen participants, including logistics software vendors WNS and Vinturas, the Port of Valencia and Lufthansa Industry Solutions. Adding a shipper to its ecosystem is an important step for DCSA, which for years has been encouraging shippers to press their ocean carrier and 3PL partners to adopt the standards the consortium has developed around cargo tracking, electronic bills of lading, just-in-time port calls, schedules and more. “Having a global category leader engage directly in this work validates the relevance of the DCSA+ model and strengthens collaboration between cargo owners and carriers as we move toward consistent digital practices across the industry,” Mariana Bock-Losada, chief growth officer at DCSA, said in the statement. DCSA last month launched an identity exchange tool for companies in the logistics industry to manage internal compliance checks, its first such product. The ocean carrier members of DCSA are Mediterranean Shipping Co., Hapag-Lloyd, Maersk, CMA CGM, Evergreen, HMM, Yang Ming, Zim Integrated Shipping Services and PIL. Contact Eric Johnson at eric.johnson@spglobal.com .

Logistics Technology News

IKEA becomes first shipper to join carrier digital consortium program

<div class="phx-topic abstract-wrapper">Ocean carriers and terminal stakeholders at Sri Lanka’s Colombo Port are dealing with operational chaos that resulted from a three-day shutdown caused by Cyclone Ditwah, said to be the strongest storm to have struck the country in nearly a decade.</div>

Ocean carriers and terminal stakeholders at Sri Lanka’s Colombo Port are dealing with operational chaos that resulted from a three-day shutdown caused by Cyclone Ditwah, said to be the strongest storm to have struck the country in nearly a decade.

<div class="phx-topic">Several parts of Southeast Asia have been through extreme weather events over the past week or so, causing widespread transport network disruptions, both quayside and inland. Ocean carriers and terminal stakeholders at Sri Lanka’s Colombo Port are dealing with operational chaos that resulted from a three-day shutdown caused by Cyclone Ditwah, said to be the strongest storm to have struck the country in nearly a decade. Colombo — South Asia’s leading container hub — on Nov. 26 suspended all operations in response to a government weather advisory. The port reopened to traffic Saturday morning, facing a long queue of ships to be serviced. As the backlog of anchored vessels slowly eases, sources put average berthing delays across Colombo terminals as of Tuesday at two to three days. “While yard occupancy is at a manageable level, restoring normal vessel windows could take several days after a 72-hour marine halt,” a Colombo terminal executive who didn’t want to be identified told the Journal of Commerce. “Inter-terminal container movements are now smooth due to low on-dock volumes.” The port authority has allowed cargo owners additional free days to clear stranded boxes, but inland freight services into Sri Lanka’s interior remain hobbled by damaged rail and road links, sources say. In India, while no port closures have been declared along the east coast that is facing a bout of stormy weather over the last two days, local shipping sources have reported delays to vessel sailings and cargo flows across main gateways in the region, including Chennai, Tuticorin, Ennore and Kattupalli. “Terminals are operating at a slower pace due to challenging conditions,” said a Chennai-based ship agent. Weather has also been a major concern for supply chain and business stakeholders across Malaysia, Vietnam and Thailand, according to reports. “The floods have resulted in some road closures, likely impacting container traffic to and from Port Klang,” global forwarder Kuehne + Nagel said in a report. “As a result, there have been requests to extend the timeline for laden containers to be turned into the port.” Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

Several parts of Southeast Asia have been through extreme weather events over the past week or so, causing widespread transport network disruptions, both quayside and inland. Ocean carriers and terminal stakeholders at Sri Lanka’s Colombo Port are dealing with operational chaos that resulted from a three-day shutdown caused by Cyclone Ditwah, said to be the strongest storm to have struck the country in nearly a decade. Colombo — South Asia’s leading container hub — on Nov. 26 suspended all operations in response to a government weather advisory. The port reopened to traffic Saturday morning, facing a long queue of ships to be serviced. As the backlog of anchored vessels slowly eases, sources put average berthing delays across Colombo terminals as of Tuesday at two to three days. “While yard occupancy is at a manageable level, restoring normal vessel windows could take several days after a 72-hour marine halt,” a Colombo terminal executive who didn’t want to be identified told the Journal of Commerce. “Inter-terminal container movements are now smooth due to low on-dock volumes.” The port authority has allowed cargo owners additional free days to clear stranded boxes, but inland freight services into Sri Lanka’s interior remain hobbled by damaged rail and road links, sources say. In India, while no port closures have been declared along the east coast that is facing a bout of stormy weather over the last two days, local shipping sources have reported delays to vessel sailings and cargo flows across main gateways in the region, including Chennai, Tuticorin, Ennore and Kattupalli. “Terminals are operating at a slower pace due to challenging conditions,” said a Chennai-based ship agent. Weather has also been a major concern for supply chain and business stakeholders across Malaysia, Vietnam and Thailand, according to reports. “The floods have resulted in some road closures, likely impacting container traffic to and from Port Klang,” global forwarder Kuehne + Nagel said in a report. “As a result, there have been requests to extend the timeline for laden containers to be turned into the port.” Contact Bency Mathew at bencyvmathew@gmail.com .

Port News

Marine terminals

International ports

Severe storms swamp Southeast Asia supply chains, with Colombo hardest hit

<div class="phx-topic abstract-wrapper">The conflicting interests became apparent last week when the Suez Canal Authority issued a statement indicating that Maersk planned to resume normal transits in December, triggering a quick response from the carrier that no timeline had been set. </div>

The conflicting interests became apparent last week when the Suez Canal Authority issued a statement indicating that Maersk planned to resume normal transits in December, triggering a quick response from the carrier that no timeline had been set.

<div class="phx-topic">Geopolitical forces favoring the resumption of container trade through the Red Sea and the corresponding commercial reluctance to do so are converging after nearly two years of most ships diverting around southern Africa to avoid attacks by Houthi militants. The conflicting interests became apparent in late November when the Suez Canal Authority (SCA) issued a statement indicating that Maersk planned to resume normal transits in December, triggering a quick response from the carrier that no timeline had been set. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6126957_0.1.jpg"></img></div>But the contours of a clash are taking shape. Facing monthly losses of $800 million, Egypt President Abdel Fattah El-Sisi said earlier this year the country desperately wants full use of the canal to resume without further delay. After exerting little influence to reopen the Canal, Egypt saw fresh hope after the Oct. 13 Israel-Hamas peace summit in Sharm El-Sheikh, Egypt, attended by Sisi, US President Donald Trump and representatives of 20 countries. The SCA on Nov. 25 said the event “succeeded in paving the way for restoring the rates of traffic in the region back to normal.” Despite the pushback by Maersk and its Gemini partner Hapag-Lloyd, the peace conference was potentially significant regarding the Suez. The conference endorsed the October agreement between Hamas and Israel to end the war in Gaza, the hostilities that led the Houthis to start firing on shipping in late 2023. So, in theory, the end of active fighting between Israel and Hamas should end the attacks and fully reopen the waterway. But it’s not so simple. Mideast analysts have little confidence that hostilities have truly ended, and thus say the pause in attacks by the Houthis disclosed in early November is in fact not permanent. The tenuous nature of Mideast peace was reflected in ships failing to return to the Red Sea following a May announcement by Trump of a deal with the Houthis, under which the US would stop bombing the Iran-aligned group and the militants would stop menacing ships seeking to transit the Red Sea and Suez Canal. <h3>Carriers’ views are complex </h3>Carriers say they believe the Suez is the natural route connecting Asia and Europe. CMA CGM Egypt &amp; Sudan Cluster CEO Tariq Zaghloul was quoted by the Canal authority in early November saying “there is no alternative to the Suez.” But carriers are also disinclined to resume normal transits and perform extensive reworking of their networks, including transshipment points, only to have to re-divert if shipping were to come under renewed attack. Thus, in assessing the real situation, they have thus far concluded that not enough has changed to warrant resumption of normal routings between Asia and Europe and Asia and the North American East Coast. “The Houthi decision to pause attacks is probably a tactical decision to allow the group to rearm and rebuild damaged infrastructure,” Jack Kennedy, head of Middle East and North Africa country risk at S&amp;P Global Market Intelligence, wrote on Nov. 12 in an assessment he said is unchanged as of Nov. 26. “Although it reduces the likelihood of attacks on shipping while the Gaza ceasefire holds, there remains a severe risk of attacks on vessels in transit in the one-year outlook if, as is likely, the ceasefire between Hamas and Israel breaks down permanently without progressing to its later stages,” Kennedy said. There are reasons why it is to the Houthi’s advantage to continue the attacks, he said. “The Houthis have incentive to continue some level of attack activity in the Red Sea and against Israel in the one-year outlook in order to secure external financial and military support and to continue to generate domestic support within Yemen,” Kennedy said. S&amp;P Global is the parent company of the Journal of Commerce. With the ongoing diversions serving as stark evidence that Mideast peace is tenuous, Egypt — in citing the peace conference as having cleared the way to normal transits — is hoping to draw a straight line between geopolitics and the ongoing diversions. And they are hoping the US draws the same line, seeing the issue in big picture terms and rejecting obstacles tied to the operational realities of shipping. “If the [Trump] administration links the canal disruption directly to their broader peace deal efforts in the Middle East, they could ramp up the regulatory or diplomatic playbook,” said Andrew Petrisin, who served as deputy assistant secretary for multimodal freight within the US Department of Transportation from June 2024 to January 2025 and is now CEO of Laneway, an online platform that enables the trading of guaranteed container space. Petrisin told the Journal of Commerce the White House, in an effort to pressure carriers to resume transits through the Suez, could try to frame the vessel diversions as causing rising costs for consumers. “If they decide that avoiding the Suez is driving inflation, given the recent election results and the focus on affordability, they may try to frame the carriers’ safety decisions as raising prices,” Petrisin said. “Politically, this angle is an easier sell than a complex argument about how commercial shipping impacts a peace treaty.” Economists have previously told the Journal of Commerce they see no evidence in data that the diversions are impacting inflation in the US. Any effort to point the finger at ocean carriers would echo the Biden administration’s rhetoric blaming carriers for price gouging during the pandemic. <h3>US security guarantees? </h3>From the point of view of carriers, their reluctance to resume Suez transits remains high due to safety risks. The financial advantage of vessel diversions, never mentioned by carriers, is a consideration in the background given that resumption of Suez transits would dump about 10% of global capacity back into the market and soften freight rates, although the effect would be muted over several months by the extensive port congestion many believe would result from a massive realignment of East-West networks. “There are many pieces to fall in place before they can [resume Suez transits], and insurance is one factor,” said Patrick Fay, CEO of BOC International. Thus, according to industry sources, resuming Suez transits would likely require more than mere rhetoric from the US administration. For example, the US would likely have to put security guarantees in place beyond what it has already done, perhaps increasing its naval presence in the region, industry sources say. But that would run into a view expressed by Mideast analysts that the Houthis are too agile and dug in within Yemen to be eliminated as a military threat to shipping. And if efforts were made by the US to impose fines on carriers for not using the Suez, were it to come to that, carriers would resist, Petrisin believes. “I don’t see a world where they risk the safety of their people and fleets for fear of a port fee,” he said. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

Geopolitical forces favoring the resumption of container trade through the Red Sea and the corresponding commercial reluctance to do so are converging after nearly two years of most ships diverting around southern Africa to avoid attacks by Houthi militants. The conflicting interests became apparent in late November when the Suez Canal Authority (SCA) issued a statement indicating that Maersk planned to resume normal transits in December, triggering a quick response from the carrier that no timeline had been set. But the contours of a clash are taking shape. Facing monthly losses of $800 million, Egypt President Abdel Fattah El-Sisi said earlier this year the country desperately wants full use of the canal to resume without further delay. After exerting little influence to reopen the Canal, Egypt saw fresh hope after the Oct. 13 Israel-Hamas peace summit in Sharm El-Sheikh, Egypt, attended by Sisi, US President Donald Trump and representatives of 20 countries. The SCA on Nov. 25 said the event “succeeded in paving the way for restoring the rates of traffic in the region back to normal.” Despite the pushback by Maersk and its Gemini partner Hapag-Lloyd, the peace conference was potentially significant regarding the Suez. The conference endorsed the October agreement between Hamas and Israel to end the war in Gaza, the hostilities that led the Houthis to start firing on shipping in late 2023. So, in theory, the end of active fighting between Israel and Hamas should end the attacks and fully reopen the waterway. But it’s not so simple. Mideast analysts have little confidence that hostilities have truly ended, and thus say the pause in attacks by the Houthis disclosed in early November is in fact not permanent. The tenuous nature of Mideast peace was reflected in ships failing to return to the Red Sea following a May announcement by Trump of a deal with the Houthis, under which the US would stop bombing the Iran-aligned group and the militants would stop menacing ships seeking to transit the Red Sea and Suez Canal. Carriers’ views are complex Carriers say they believe the Suez is the natural route connecting Asia and Europe. CMA CGM Egypt & Sudan Cluster CEO Tariq Zaghloul was quoted by the Canal authority in early November saying “there is no alternative to the Suez.” But carriers are also disinclined to resume normal transits and perform extensive reworking of their networks, including transshipment points, only to have to re-divert if shipping were to come under renewed attack. Thus, in assessing the real situation, they have thus far concluded that not enough has changed to warrant resumption of normal routings between Asia and Europe and Asia and the North American East Coast. “The Houthi decision to pause attacks is probably a tactical decision to allow the group to rearm and rebuild damaged infrastructure,” Jack Kennedy, head of Middle East and North Africa country risk at S&P Global Market Intelligence, wrote on Nov. 12 in an assessment he said is unchanged as of Nov. 26. “Although it reduces the likelihood of attacks on shipping while the Gaza ceasefire holds, there remains a severe risk of attacks on vessels in transit in the one-year outlook if, as is likely, the ceasefire between Hamas and Israel breaks down permanently without progressing to its later stages,” Kennedy said. There are reasons why it is to the Houthi’s advantage to continue the attacks, he said. “The Houthis have incentive to continue some level of attack activity in the Red Sea and against Israel in the one-year outlook in order to secure external financial and military support and to continue to generate domestic support within Yemen,” Kennedy said. S&P Global is the parent company of the Journal of Commerce. With the ongoing diversions serving as stark evidence that Mideast peace is tenuous, Egypt — in citing the peace conference as having cleared the way to normal transits — is hoping to draw a straight line between geopolitics and the ongoing diversions. And they are hoping the US draws the same line, seeing the issue in big picture terms and rejecting obstacles tied to the operational realities of shipping. “If the [Trump] administration links the canal disruption directly to their broader peace deal efforts in the Middle East, they could ramp up the regulatory or diplomatic playbook,” said Andrew Petrisin, who served as deputy assistant secretary for multimodal freight within the US Department of Transportation from June 2024 to January 2025 and is now CEO of Laneway, an online platform that enables the trading of guaranteed container space. Petrisin told the Journal of Commerce the White House, in an effort to pressure carriers to resume transits through the Suez, could try to frame the vessel diversions as causing rising costs for consumers. “If they decide that avoiding the Suez is driving inflation, given the recent election results and the focus on affordability, they may try to frame the carriers’ safety decisions as raising prices,” Petrisin said. “Politically, this angle is an easier sell than a complex argument about how commercial shipping impacts a peace treaty.” Economists have previously told the Journal of Commerce they see no evidence in data that the diversions are impacting inflation in the US. Any effort to point the finger at ocean carriers would echo the Biden administration’s rhetoric blaming carriers for price gouging during the pandemic. US security guarantees? From the point of view of carriers, their reluctance to resume Suez transits remains high due to safety risks. The financial advantage of vessel diversions, never mentioned by carriers, is a consideration in the background given that resumption of Suez transits would dump about 10% of global capacity back into the market and soften freight rates, although the effect would be muted over several months by the extensive port congestion many believe would result from a massive realignment of East-West networks. “There are many pieces to fall in place before they can [resume Suez transits], and insurance is one factor,” said Patrick Fay, CEO of BOC International. Thus, according to industry sources, resuming Suez transits would likely require more than mere rhetoric from the US administration. For example, the US would likely have to put security guarantees in place beyond what it has already done, perhaps increasing its naval presence in the region, industry sources say. But that would run into a view expressed by Mideast analysts that the Houthis are too agile and dug in within Yemen to be eliminated as a military threat to shipping. And if efforts were made by the US to impose fines on carriers for not using the Suez, were it to come to that, carriers would resist, Petrisin believes. “I don’t see a world where they risk the safety of their people and fleets for fear of a port fee,” he said. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Asia-Europe

Complexity of resumption of Suez transits beginning to take shape

<div class="phx-topic abstract-wrapper">With the proposed Union Pacific-Norfolk Southern merger, the US rail industry finds itself facing a new future but the same historical set of challenges.</div>

With the proposed Union Pacific-Norfolk Southern merger, the US rail industry finds itself facing a new future but the same historical set of challenges.

<div class="phx-topic">Oct. 14 marked the 45th anniversary of President Jimmy Carter signing The Harley O. Staggers Rail Act of 1980, named for the chairman of the House Committee on Interstate and Foreign Commerce (today the Committee on Energy and Commerce). However, the real “heavy lifting” to get the bill passed was by Rep. Jim Florio, the New Jersey Democrat who chaired the House Subcommittee on Commerce, Transportation, and Tourism. The Association of American Railroads (AAR) frequently points out how, by 1980, the railroad industry was on the brink of collapse until Congress passed bipartisan legislation to partially deregulate the industry, thereby allowing market-driven pricing, customer-specific contracts and the ability to shed unprofitable routes. However, this neglects the tortured decade of the 1970s when Congress was repeatedly drawn into legislating railroad matters. It started with The Rail Passenger Service Act of 1970, creating Amtrak. This relieved private railroads from their losses operating passenger service. But it was not enough to save Penn Central, so Congress passed the Regional Rail Reorganization Act of 1973 (the “3R Act”) to salvage viable freight operations from Penn Central and other failing rail lines in the Northeast, mid-Atlantic and Midwest. It created the United States Railway Association (USRA) to develop a “Final System Plan” for the reorganization into a single entity — Conrail. Finally, The Railroad Revitalization and Regulatory Reform Act of 1976 (The “4R Act”) approved the Final System Plan, enabling Conrail to start operations on April 1, 1976. It provided what it thought was sufficient funding — an initial federal “investment” of $2.026 billion for Conrail to acquire the assets of bankrupt Northeast and Midwest railroads and get its operations started. This funding turned out to be insufficient. Conrail subsequently sought and received an additional $3 billion. However, by 1979, it had almost exhausted that amount. Under the leadership of a new CEO, L. Stanley Crane, Conrail claimed that it could succeed as a private entity if the rail marketplace was deregulated. <h3>Regulation intended to perpetuate monopolies </h3>Railroads had been operating under a regulated system since the Interstate Commerce Act of 1887. This legislation was an early initiative of the Progressive era and preceded other efforts at regulation, such as the Sherman Antitrust Act three years later. The Interstate Commerce Commission (ICC) became the model for rate-of-return regulation of public utilities. The microeconomic theory is that a monopoly business can be regulated by having the government control the prices charged by the market to a level equal to the efficient costs of production, plus a government-permitted rate of return on capital. This model became the norm for oversight of many asset-based, network-operating businesses such as communications, utilities, and other transportation modes. What is overlooked by many is that — by design — regulation was intended to perpetuate monopolies because it ensured that excess capacity would be available in the event of war or other national emergencies. The monopoly license was maintained through a series of operating authorities that determined which providers could serve which markets. Consumers paid more — but hopefully not too much more. This legislation was passed when railroads were the primary means of freight and passenger transportation. However, the subsequent development of the Interstate Highway System and air traffic changed that dominant position. Meanwhile, the onset of persistent stagflation during the 1970s encouraged deregulatory efforts in many regulated industries. The Airline Deregulation Act of 1978 was a predecessor. However, the Interstate Commerce Commission, under Chairman Dan O’Neal, had already taken initiatives, permitted by the 4R Act, to deregulate certain rail sectors, such as intermodal. <h3>Key components of Staggers Act </h3>The Staggers Act had three key components: Railroads were able to negotiate contracts with a customer at market-based rates; reduced regulatory oversight over mergers and abandonments was enacted; and a regulatory backstop was established to protect shippers lacking effective competition. These legislative efforts completely inverted the commercial process. Regulation was cost-based pricing. Shippers were price takers. Deregulation begat price-based costing. The market determined the competitive price, and the carrier needed to find a way to produce the service so as to be profitable. This was accomplished in numerous ways: Railroad mergers enabled increased economies of scale and reduced overhead; technology supported cost reductions (e.g., end of train devices replacing the caboose); significant amounts of the networks were spun off to short line operations; and a reduction in train crew size from five to two and extending crew districts reduced costs significantly. The final step of this reduction required Congressional help in 1991, with the imposition of Presidential Emergency Board 219. But downsizing could only do so much. Topline growth was necessary. Into this opportunity stepped intermodal. As international traffic grew with globalization, a large part of the volume growth came from ocean carriers. Traditional domestic customers increased their volume, and major new customers, such as J.B. Hunt, entered as well. It was a win-win situation for everyone. Railroads filled excess capacity, and intermodal customers enjoyed reliable and cost-effective service. Everything went well until the summer of 1993. The weather that summer caused terrible service problems. As an industry, we missed the wakeup call. We were too eager to attribute the problems to a fluke weather condition, not recognizing that capacity utilization was nearing maximum. Since then, the industry has been dealing with the challenge of increasing the top and bottom lines simultaneously. This has frequently proven elusive. The advent of activist investors has only raised the stakes. With the proposed Union Pacific-Norfolk Southern merger, the industry finds itself facing a new future but the same historical set of challenges. In retrospect, it is clear to see how we got here, but it is less clear where we are going. Contact Ted Prince at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>.</div>

Oct. 14 marked the 45th anniversary of President Jimmy Carter signing The Harley O. Staggers Rail Act of 1980, named for the chairman of the House Committee on Interstate and Foreign Commerce (today the Committee on Energy and Commerce). However, the real “heavy lifting” to get the bill passed was by Rep. Jim Florio, the New Jersey Democrat who chaired the House Subcommittee on Commerce, Transportation, and Tourism. The Association of American Railroads (AAR) frequently points out how, by 1980, the railroad industry was on the brink of collapse until Congress passed bipartisan legislation to partially deregulate the industry, thereby allowing market-driven pricing, customer-specific contracts and the ability to shed unprofitable routes. However, this neglects the tortured decade of the 1970s when Congress was repeatedly drawn into legislating railroad matters. It started with The Rail Passenger Service Act of 1970, creating Amtrak. This relieved private railroads from their losses operating passenger service. But it was not enough to save Penn Central, so Congress passed the Regional Rail Reorganization Act of 1973 (the “3R Act”) to salvage viable freight operations from Penn Central and other failing rail lines in the Northeast, mid-Atlantic and Midwest. It created the United States Railway Association (USRA) to develop a “Final System Plan” for the reorganization into a single entity — Conrail. Finally, The Railroad Revitalization and Regulatory Reform Act of 1976 (The “4R Act”) approved the Final System Plan, enabling Conrail to start operations on April 1, 1976. It provided what it thought was sufficient funding — an initial federal “investment” of $2.026 billion for Conrail to acquire the assets of bankrupt Northeast and Midwest railroads and get its operations started. This funding turned out to be insufficient. Conrail subsequently sought and received an additional $3 billion. However, by 1979, it had almost exhausted that amount. Under the leadership of a new CEO, L. Stanley Crane, Conrail claimed that it could succeed as a private entity if the rail marketplace was deregulated. Regulation intended to perpetuate monopolies Railroads had been operating under a regulated system since the Interstate Commerce Act of 1887. This legislation was an early initiative of the Progressive era and preceded other efforts at regulation, such as the Sherman Antitrust Act three years later. The Interstate Commerce Commission (ICC) became the model for rate-of-return regulation of public utilities. The microeconomic theory is that a monopoly business can be regulated by having the government control the prices charged by the market to a level equal to the efficient costs of production, plus a government-permitted rate of return on capital. This model became the norm for oversight of many asset-based, network-operating businesses such as communications, utilities, and other transportation modes. What is overlooked by many is that — by design — regulation was intended to perpetuate monopolies because it ensured that excess capacity would be available in the event of war or other national emergencies. The monopoly license was maintained through a series of operating authorities that determined which providers could serve which markets. Consumers paid more — but hopefully not too much more. This legislation was passed when railroads were the primary means of freight and passenger transportation. However, the subsequent development of the Interstate Highway System and air traffic changed that dominant position. Meanwhile, the onset of persistent stagflation during the 1970s encouraged deregulatory efforts in many regulated industries. The Airline Deregulation Act of 1978 was a predecessor. However, the Interstate Commerce Commission, under Chairman Dan O’Neal, had already taken initiatives, permitted by the 4R Act, to deregulate certain rail sectors, such as intermodal. Key components of Staggers Act The Staggers Act had three key components: Railroads were able to negotiate contracts with a customer at market-based rates; reduced regulatory oversight over mergers and abandonments was enacted; and a regulatory backstop was established to protect shippers lacking effective competition. These legislative efforts completely inverted the commercial process. Regulation was cost-based pricing. Shippers were price takers. Deregulation begat price-based costing. The market determined the competitive price, and the carrier needed to find a way to produce the service so as to be profitable. This was accomplished in numerous ways: Railroad mergers enabled increased economies of scale and reduced overhead; technology supported cost reductions (e.g., end of train devices replacing the caboose); significant amounts of the networks were spun off to short line operations; and a reduction in train crew size from five to two and extending crew districts reduced costs significantly. The final step of this reduction required Congressional help in 1991, with the imposition of Presidential Emergency Board 219. But downsizing could only do so much. Topline growth was necessary. Into this opportunity stepped intermodal. As international traffic grew with globalization, a large part of the volume growth came from ocean carriers. Traditional domestic customers increased their volume, and major new customers, such as J.B. Hunt, entered as well. It was a win-win situation for everyone. Railroads filled excess capacity, and intermodal customers enjoyed reliable and cost-effective service. Everything went well until the summer of 1993. The weather that summer caused terrible service problems. As an industry, we missed the wakeup call. We were too eager to attribute the problems to a fluke weather condition, not recognizing that capacity utilization was nearing maximum. Since then, the industry has been dealing with the challenge of increasing the top and bottom lines simultaneously. This has frequently proven elusive. The advent of activist investors has only raised the stakes. With the proposed Union Pacific-Norfolk Southern merger, the industry finds itself facing a new future but the same historical set of challenges. In retrospect, it is clear to see how we got here, but it is less clear where we are going. Contact Ted Prince at ted@tricitiesintermodal.com .

Surface

A look back at the ‘Staggers Act’ and where the US rail industry is today

<div class="phx-topic abstract-wrapper">If the proposed Union Pacific–Norfolk Southern merger proceeds, the balance of power inside a little-known cooperative that serves as the industry’s shared equipment pool could shift dramatically.</div>

If the proposed Union Pacific–Norfolk Southern merger proceeds, the balance of power inside a little-known cooperative that serves as the industry’s shared equipment pool could shift dramatically.

<div class="phx-topic">When your railroad says “no cars available,” the problem usually isn’t a shortage. It’s a cooperative most shippers have never heard of — one that controls nearly every intermodal container, autorack and flatcar in North America. And if the proposed Union Pacific (UP)–Norfolk Southern (NS) merger proceeds, the balance of power inside that cooperative could shift dramatically. That cooperative is TTX Company. While shippers and unions debate potential service disruptions and job losses from the $85 billion merger announced in July, a more fundamental question has gone unasked: What happens when one railroad becomes the dominant voice in the industry’s shared equipment pool? <h3>The system you didn’t know existed </h3>TTX manages approximately 177,000 well cars, flats, autoracks and boxcars, representing about $17 billion in assets. It’s a neutral pool owned collectively by the Class I railroads, operating under Surface Transportation Board (STB) oversight since 1974. The concept is simple: Competing railroads share rolling stock rather than hoarding it. When a car finishes one move, it can be loaded again immediately, regardless of whose track it’s on next. This model has saved the industry billions in duplicate investment and given shippers a measure of reliability in an otherwise fragmented system. Cars flow to demand, not ownership. Repairs are standardized. Procurement is centralized. Until now, no single railroad has had enough control to tilt the playing field. <h3>Why the merger changes everything </h3>The combined Union Pacific–Norfolk Southern network would span nearly 60% of US rail route miles across 43 states, likely making them TTX’s largest shareholder by a significant margin. On paper, neutrality is guaranteed through the STB’s pooling agreement. In practice, concentration of influence can change incentives subtly, but powerfully. Who prioritizes which lanes for car replacement? Who decides where limited heavy-duty flats or autoracks are deployed first? When I was at Maersk negotiating large-scale rail contracts, we constantly ran into a black hole of visibility. Equipment was technically available, but no one could pinpoint where it was or who controlled the next move. The pooling model made coordination possible, but it also made accountability diffuse. Now imagine that opacity combined with ownership concentration. A railroad controlling the largest stake in TTX doesn’t need to explicitly starve competitors of equipment. It just needs to optimize for its own network first. Repairs get prioritized in its lanes. New equipment gets spec’d for its corridors. Allocation algorithms favor its terminals. The result isn’t dramatic — it’s death by a thousand micro-decisions that tilt velocity in one direction. <h3>What gravity looks like </h3>Every time a major shipper changes carriers, the math inside the TTX pool shifts. Steel doesn’t teleport. Cars must physically migrate through the network, a process that can take weeks. Shortages often follow commercial wins because the new carrier gains the freight before it gains the equipment. Even in a neutral pool, gravity takes time to reset. Post-merger, that shock absorption could become selective. If car allocation subtly favors the combined UP-NS lanes, competitors lose not just freight; they lose the equipment velocity needed to compete for the next contract. <h3>What the STB should do </h3>The STB received formal notice of the merger on July 30, 2025. The railroads plan to file their full application by Jan. 29, 2026, triggering a 16-month statutory review. The STB has broad authority to preserve equilibrium through independent TTX governance, fleet-allocation audits and service-performance metrics tied to pooling access. Whether those powers are used will determine if TTX remains the stabilizer it was built to be, or becomes another lever of competitive advantage hidden inside consolidation. The 1996 Union Pacific-Southern Pacific merger produced what the head of the nation’s largest rail union called a “massive meltdown.” Service disruptions lasted months. The STB should apply those lessons to equipment pooling now, before approval — not after the damage is done. <h3>What shippers should ask now </h3>Most customers never deal directly with TTX, but they feel its influence in every service metric. Don’t wait until after the merger is approved. Start asking pointed questions now: How do you measure car velocity in my lanes? Who controls the pool cars that serve my freight? What protections ensure neutrality if ownership concentration shifts? If your railroad can’t answer clearly, you’re not buying transportation, you’re buying uncertainty. <h3>The bottom line </h3>TTX doesn’t appear in marketing campaigns, but its model — shared steel, shared access — keeps the industry balanced. The merger debate has focused on jobs, rates and service promises. But the real test will be whether a system designed for competition can survive when one player holds the dominant stake. Because when the pool tips, everyone feels it. And once gravity shifts, it doesn’t shift back. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO), and Patriot Rail. He is the founder of Integrated Multimodal Solutions LLC and author of the Substack newsletter Signals &amp; Switches. Contact him at  <a href="mailto:paul.tonsager@multimodalsolutions.io">paul.tonsager@multimodalsolutions.io</a>. </div>

When your railroad says “no cars available,” the problem usually isn’t a shortage. It’s a cooperative most shippers have never heard of — one that controls nearly every intermodal container, autorack and flatcar in North America. And if the proposed Union Pacific (UP)–Norfolk Southern (NS) merger proceeds, the balance of power inside that cooperative could shift dramatically. That cooperative is TTX Company. While shippers and unions debate potential service disruptions and job losses from the $85 billion merger announced in July, a more fundamental question has gone unasked: What happens when one railroad becomes the dominant voice in the industry’s shared equipment pool? The system you didn’t know existed TTX manages approximately 177,000 well cars, flats, autoracks and boxcars, representing about $17 billion in assets. It’s a neutral pool owned collectively by the Class I railroads, operating under Surface Transportation Board (STB) oversight since 1974. The concept is simple: Competing railroads share rolling stock rather than hoarding it. When a car finishes one move, it can be loaded again immediately, regardless of whose track it’s on next. This model has saved the industry billions in duplicate investment and given shippers a measure of reliability in an otherwise fragmented system. Cars flow to demand, not ownership. Repairs are standardized. Procurement is centralized. Until now, no single railroad has had enough control to tilt the playing field. Why the merger changes everything The combined Union Pacific–Norfolk Southern network would span nearly 60% of US rail route miles across 43 states, likely making them TTX’s largest shareholder by a significant margin. On paper, neutrality is guaranteed through the STB’s pooling agreement. In practice, concentration of influence can change incentives subtly, but powerfully. Who prioritizes which lanes for car replacement? Who decides where limited heavy-duty flats or autoracks are deployed first? When I was at Maersk negotiating large-scale rail contracts, we constantly ran into a black hole of visibility. Equipment was technically available, but no one could pinpoint where it was or who controlled the next move. The pooling model made coordination possible, but it also made accountability diffuse. Now imagine that opacity combined with ownership concentration. A railroad controlling the largest stake in TTX doesn’t need to explicitly starve competitors of equipment. It just needs to optimize for its own network first. Repairs get prioritized in its lanes. New equipment gets spec’d for its corridors. Allocation algorithms favor its terminals. The result isn’t dramatic — it’s death by a thousand micro-decisions that tilt velocity in one direction. What gravity looks like Every time a major shipper changes carriers, the math inside the TTX pool shifts. Steel doesn’t teleport. Cars must physically migrate through the network, a process that can take weeks. Shortages often follow commercial wins because the new carrier gains the freight before it gains the equipment. Even in a neutral pool, gravity takes time to reset. Post-merger, that shock absorption could become selective. If car allocation subtly favors the combined UP-NS lanes, competitors lose not just freight; they lose the equipment velocity needed to compete for the next contract. What the STB should do The STB received formal notice of the merger on July 30, 2025. The railroads plan to file their full application by Jan. 29, 2026, triggering a 16-month statutory review. The STB has broad authority to preserve equilibrium through independent TTX governance, fleet-allocation audits and service-performance metrics tied to pooling access. Whether those powers are used will determine if TTX remains the stabilizer it was built to be, or becomes another lever of competitive advantage hidden inside consolidation. The 1996 Union Pacific-Southern Pacific merger produced what the head of the nation’s largest rail union called a “massive meltdown.” Service disruptions lasted months. The STB should apply those lessons to equipment pooling now, before approval — not after the damage is done. What shippers should ask now Most customers never deal directly with TTX, but they feel its influence in every service metric. Don’t wait until after the merger is approved. Start asking pointed questions now: How do you measure car velocity in my lanes? Who controls the pool cars that serve my freight? What protections ensure neutrality if ownership concentration shifts? If your railroad can’t answer clearly, you’re not buying transportation, you’re buying uncertainty. The bottom line TTX doesn’t appear in marketing campaigns, but its model — shared steel, shared access — keeps the industry balanced. The merger debate has focused on jobs, rates and service promises. But the real test will be whether a system designed for competition can survive when one player holds the dominant stake. Because when the pool tips, everyone feels it. And once gravity shifts, it doesn’t shift back. Paul Tonsager has held executive roles at Maersk, CN Rail, CN Worldwide, Coyote (RXO), and Patriot Rail. He is the founder of Integrated Multimodal Solutions LLC and author of the Substack newsletter Signals & Switches. Contact him at   paul.tonsager@multimodalsolutions.io .

Intermodal providers

UP-NS merger could mean new dominant voice inside rail industry cooperative

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Planned capacity

Blanked capacity

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

North Europe to US East and Gulf coasts container capacity (eeSea)

Northern Europe to US East and Gulf Coasts Container Capacity and Deployment (eeSea) Gateway

<div class="phx-topic abstract-wrapper">Months of frontloading explain the harsher-than-usual import slowdown in the final months of this year, but uncertain consumer sentiment and ever-changing US tariff policy are keeping retail inventories running lean. </div>

Months of frontloading explain the harsher-than-usual import slowdown in the final months of this year, but uncertain consumer sentiment and ever-changing US tariff policy are keeping retail inventories running lean.

<div class="phx-topic">The end of year in ocean shipping in the US is generally lackluster given that most retailers have already brought their goods into the country and still have a month or two early in the new year to restock. But this end to 2025 and start of 2026 is looking more than just lackluster; it’s a deepening slowdown with no end in sight. The weaker inbound volumes are being felt by transport providers from drayage operators to ocean carriers trying to keep a floor on subdued container spot rates. For at least a year, US importers have been frontloading imports out of fear of higher tariffs, and as American consumers become more cautious, they’re replenishing judiciously. US retailers <a href="https://www.joc.com/article/us-retailers-throttle-back-on-imports-amid-uncertain-consumer-sentiment-6111471">are forecasting double-digit percentage declines</a> in November and December, and monthly volumes are not expected to exceed 2 million TEUs through March, according to the latest Global Port Tracker (GPT), produced by Hackett Associates and the National Retail Federation (NRF). Months of frontloading explain the harsher-than-usual import slowdown in the final months of this year, but uncertain consumer sentiment and ever-changing US tariff policy are keeping retail inventories running lean. “These conditions make market forecasting highly uncertain,” said Ben Hackett, the consultancy’s founder. “Our trade outlook is for a small decline in imports this year compared with 2024 and a further, larger decline in the first quarter of 2026.” US container volumes in 2026 will be flat to down 2% year over year, according to Moody’s Ratings. Comparably, volumes are to end this year in the range of no growth to an up to 1% retraction compared with 2024, the ratings agency stated in a research note released Tuesday. Winter holiday sales are anticipated to grow 3.2% this year, a notably slower pace than the 4.8% expansion recorded last year, according to S&amp;P Global. That slowdown comes as consumer prices rise and job gains slow, with unemployment rising from 4.3% in August to 4.4% in September, according to the Bureau of Labor Statistics. But the US economy keeps expanding, with manufacturing activity growing in October to a reading of 52.2 from 52.5 in the prior month as assessed by S&amp;P Global Market Intelligence’s US Manufacturing Purchasing Managers’ Index.<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e303e2ee-5389-46af-85b9-111d4f8c34b5"></dynamic-object></div>“Critically, this downshift in [retail] growth is an untimely reminder of consumers’ precarious position; they have managed to continue spending despite the ebb and flow of prices in recent years, but each time their steps have been more measured,” said Michael Zdinak, who leads US consumer markets services at S&amp;P Global. The US consumer price index (CPI) in September expanded 0.3% on a seasonally adjusted basis, with annual inflation at 3%, reflecting “modest price pressures continuing to affect household budget,” according to the CPI report. The 43-day US federal government shutdown delayed the October release of the US CPI and contributed to the University of Michigan’s consumer sentiment index falling for the second straight month — and to its lowest reading since May — in November. Retailers have noted the change in consumers. Home Depot, for example, cited concerns over affordability and jobs, lowering its outlook for the rest of its fiscal 2025 year, which ends in January. “The economic uncertainty continues, largely now due to living costs,” Ted Decker, the chair, president and CEO of the home improvement retailer, said during a Nov. 18 third-quarter earnings call. “Affordability is a word that’s being used a lot. Layoffs, increased job concerns, etc. So that’s why we don’t see an uptick in that underlying storm-adjusted demand in the business.” It’s not surprising then that retailers are making sure they have just enough product on hand. US inventory-to-retail sales ratios for retailers have hovered between 1.28 and 1.32, according to the US Bureau of Economic Analysis, suggesting that despite the frontloading of imports in the first half of the year, stocks remain lean. Retailers appear to be extending that strategy into the new year; the GPT report forecasts imports will fall 12.2% year over year to 5.62 million TEUs in the first quarter of 2026. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="0302a4da-1012-4174-970d-3888b1ecc536"></dynamic-object></div><h3>‘A bit of a freefall’ </h3>Laden US imports this year peaked in July at 2.6 million TEUs, before sliding 4.6% year over year between August and October, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. But it’s volumes from Asia that have seen the worst of the drop-off, with inbound shipments, including those from India, falling 5.6% in August–October, according to PIERS. Facing a US tariff rate of approximately 47%, laden imports from China plunged 16.7% year over year in the same three-month period.<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b2c4ed98-5885-4436-931d-5f035f537df1"></dynamic-object></div>The weakening Asia trade as of mid-November had dragged so-called bullet rates — prices quoted for specific voyages — from Asia to the US West Coast to below $1,400 per FEU. Spot rates to the West Coast, as measured by various indexes, are down 30% to 60% year over year, depending on the index and trade lane. Ocean carriers’ biweekly attempts to impose general rate increases have failed, lifting pricing for a just few days before they continue their descent. In 10 of 12 weeks from the end of July through mid-October, trans-Pacific spot rates even fell below the average long-term service contract rate of approximately $1,600 per FEU, according to rate benchmarking firm Xeneta.<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="cb72bd0b-98b7-487c-8228-ec175a90826b"></dynamic-object></div>“Prices, again, are just in a bit of a freefall,” Sanjay Tejwani, CEO of consulting firm 365 Logistics, told the Journal of Commerce. Ocean carriers “have done what they can,” using blank sailings and shifting vessels between trades to try to match demand, “but it’s too little, too late.” Yet, there hasn’t been a notable scramble among cargo owners to reopen service contracts, which typically expire at the end of April. Forwarders have also been increasingly blending spot and contract rates for cargo owners to find a better medium for the market to offer customers. “We’ve not seen any big movements on contracts being open now, since the contracts have been trending down during Q3, and it was not very timely for people to do when they know they have the negotiation coming soon and as long as things are moving their way,” Maersk CEO Vincent Clerc said during the company’s third-quarter earnings call Nov. 6, adding that customers have generally been meeting their allocated contract volumes. Despite the lower spot rates and weaker outlook, container lines haven’t pulled out services and have blanked capacity at levels similar to past years. In fact, ocean carriers plan to add more capacity from Asia to the US in December, according to maritime intelligence provider eeSea.Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. Associate Editor Laura Robb contributed to this report. </div>

The end of year in ocean shipping in the US is generally lackluster given that most retailers have already brought their goods into the country and still have a month or two early in the new year to restock. But this end to 2025 and start of 2026 is looking more than just lackluster; it’s a deepening slowdown with no end in sight. The weaker inbound volumes are being felt by transport providers from drayage operators to ocean carriers trying to keep a floor on subdued container spot rates. For at least a year, US importers have been frontloading imports out of fear of higher tariffs, and as American consumers become more cautious, they’re replenishing judiciously. US retailers are forecasting double-digit percentage declines in November and December, and monthly volumes are not expected to exceed 2 million TEUs through March, according to the latest Global Port Tracker (GPT), produced by Hackett Associates and the National Retail Federation (NRF). Months of frontloading explain the harsher-than-usual import slowdown in the final months of this year, but uncertain consumer sentiment and ever-changing US tariff policy are keeping retail inventories running lean. “These conditions make market forecasting highly uncertain,” said Ben Hackett, the consultancy’s founder. “Our trade outlook is for a small decline in imports this year compared with 2024 and a further, larger decline in the first quarter of 2026.” US container volumes in 2026 will be flat to down 2% year over year, according to Moody’s Ratings. Comparably, volumes are to end this year in the range of no growth to an up to 1% retraction compared with 2024, the ratings agency stated in a research note released Tuesday. Winter holiday sales are anticipated to grow 3.2% this year, a notably slower pace than the 4.8% expansion recorded last year, according to S&P Global. That slowdown comes as consumer prices rise and job gains slow, with unemployment rising from 4.3% in August to 4.4% in September, according to the Bureau of Labor Statistics. But the US economy keeps expanding, with manufacturing activity growing in October to a reading of 52.2 from 52.5 in the prior month as assessed by S&P Global Market Intelligence’s US Manufacturing Purchasing Managers’ Index. “Critically, this downshift in [retail] growth is an untimely reminder of consumers’ precarious position; they have managed to continue spending despite the ebb and flow of prices in recent years, but each time their steps have been more measured,” said Michael Zdinak, who leads US consumer markets services at S&P Global. The US consumer price index (CPI) in September expanded 0.3% on a seasonally adjusted basis, with annual inflation at 3%, reflecting “modest price pressures continuing to affect household budget,” according to the CPI report. The 43-day US federal government shutdown delayed the October release of the US CPI and contributed to the University of Michigan’s consumer sentiment index falling for the second straight month — and to its lowest reading since May — in November. Retailers have noted the change in consumers. Home Depot, for example, cited concerns over affordability and jobs, lowering its outlook for the rest of its fiscal 2025 year, which ends in January. “The economic uncertainty continues, largely now due to living costs,” Ted Decker, the chair, president and CEO of the home improvement retailer, said during a Nov. 18 third-quarter earnings call. “Affordability is a word that’s being used a lot. Layoffs, increased job concerns, etc. So that’s why we don’t see an uptick in that underlying storm-adjusted demand in the business.” It’s not surprising then that retailers are making sure they have just enough product on hand. US inventory-to-retail sales ratios for retailers have hovered between 1.28 and 1.32, according to the US Bureau of Economic Analysis, suggesting that despite the frontloading of imports in the first half of the year, stocks remain lean. Retailers appear to be extending that strategy into the new year; the GPT report forecasts imports will fall 12.2% year over year to 5.62 million TEUs in the first quarter of 2026. ‘A bit of a freefall’ Laden US imports this year peaked in July at 2.6 million TEUs, before sliding 4.6% year over year between August and October, according to PIERS, a sister product of the Journal of Commerce within S&P Global. But it’s volumes from Asia that have seen the worst of the drop-off, with inbound shipments, including those from India, falling 5.6% in August–October, according to PIERS. Facing a US tariff rate of approximately 47%, laden imports from China plunged 16.7% year over year in the same three-month period. The weakening Asia trade as of mid-November had dragged so-called bullet rates — prices quoted for specific voyages — from Asia to the US West Coast to below $1,400 per FEU. Spot rates to the West Coast, as measured by various indexes, are down 30% to 60% year over year, depending on the index and trade lane. Ocean carriers’ biweekly attempts to impose general rate increases have failed, lifting pricing for a just few days before they continue their descent. In 10 of 12 weeks from the end of July through mid-October, trans-Pacific spot rates even fell below the average long-term service contract rate of approximately $1,600 per FEU, according to rate benchmarking firm Xeneta. “Prices, again, are just in a bit of a freefall,” Sanjay Tejwani, CEO of consulting firm 365 Logistics, told the Journal of Commerce. Ocean carriers “have done what they can,” using blank sailings and shifting vessels between trades to try to match demand, “but it’s too little, too late.” Yet, there hasn’t been a notable scramble among cargo owners to reopen service contracts, which typically expire at the end of April. Forwarders have also been increasingly blending spot and contract rates for cargo owners to find a better medium for the market to offer customers. “We’ve not seen any big movements on contracts being open now, since the contracts have been trending down during Q3, and it was not very timely for people to do when they know they have the negotiation coming soon and as long as things are moving their way,” Maersk CEO Vincent Clerc said during the company’s third-quarter earnings call Nov. 6, adding that customers have generally been meeting their allocated contract volumes. Despite the lower spot rates and weaker outlook, container lines haven’t pulled out services and have blanked capacity at levels similar to past years. In fact, ocean carriers plan to add more capacity from Asia to the US in December, according to maritime intelligence provider eeSea. Contact Mark Szakonyi at  mark.szakonyi@spglobal.com . Associate Editor Laura Robb contributed to this report.

Forwarding

North American ports

Slump of US imports from Asia deepening

<div class="phx-topic abstract-wrapper">The ocean carrier said it still needs approvals from insurers and others, but the ceasefire in Gaza appears to be holding. </div>

The ocean carrier said it still needs approvals from insurers and others, but the ceasefire in Gaza appears to be holding.

<div class="phx-topic">Zim Integrated Shipping Services is preparing to route its ships through the Suez Canal, possibly as soon as 2026. The ocean carrier added that a return to Red Sea transits will further weaken freight rates, with Zim planning to return some chartered ships to reduce its fleet size. Chief Executive Eli Glickman said that the Israel-based Zim still needs the approval of its insurers and the owners of chartered vessels for a return to Suez routings. But “the current cease fire in Gaza is encouraging progress,” he said Thursday during the company’s third-quarter earnings conference call. Zim reported a 90% plunge in profits on weaker freight pricing. “We believe that a return to the Suez Canal in the near future now appears increasingly likely,” Glickman said. “We are preparing an operational plan to support this transition once the security situation has stabilized.” The Houthi rebels operating in Yemen earlier this month <a href="https://www.joc.com/article/houthi-pause-on-shipping-attacks-lowers-tensions-but-risk-remains-6114790">signaled they will pause attacks</a> on Israel and commercial shipping, but would resume attacks in the Red Sea if the Gaza ceasefire ended.Glickman added that while the shorter route through the Suez Canal will mean lower operating costs, “it will also increase effective vessel supply currently tied up by longer routes around the Cape of Good Hope, adding pressure on freight rates.” Zim, which charters most of its 115 container ships from other owners, is reducing its fleet size in response to further rate pressure. The company returned 22 chartered ships so far in 2025, reducing its fleet capacity by some 80,000 TEUs. Another three charters are ending this year, while another 17 are up for renewal next year, amounting to another 80,000 TEUs of capacity Zim could shed. Chief Financial Officer Xavier Destriau said Zim used short-term charters on smaller Panamax ships to supplement its capacity throughout 2021 and 2022. Going forward, Destriau said Zim will lean more on its “core” fleet of 46 long-term chartered ships and 16-owned ships, which are primarily in the 8,000- to 11,500-TEU range. “I think 2025 was clearly a downward trend in terms of operated tonnage,” he said. “We need to acknowledge that <a href="https://www.joc.com/article/strong-secondhand-container-ship-demand-defies-deteriorating-market-6077759">the charter market is still elevated</a>. So, it’s expensive to reach out the tonnage at a time when the revenue per TEU carried is under pressure.” <h3>Latin America, Southeast Asia trades in focus </h3>Zim reported third-quarter earnings of $1.02 per share, which was in line with analyst estimates but a 90% drop from the year-earlier quarter. The company largely stuck to its original full-year 2025 profit forecast. Third-quarter volumes decreased 4.5% from a year earlier to 926,000 TEUs. Its trans-Pacific volume was down slightly to 414,000 TEUs for the quarter. But its trans-Atlantic and intra-Mediterranean saw bigger respective drops of 27,000 TEUs and 21,000 TEUs for the quarter. <a href="https://www.joc.com/article/zim-signals-changes-to-med-network-amid-apparent-turkish-port-ban-6069871">Zim redirected intra-Mediterranean services away from Turkey</a> in August due to that country’s ban on Israeli-linked shipping. The average rate Zim saw during the quarter was $1,602 per forty-foot equivalent unit, a 35% drop from a year earlier. While the current trade truce between the US and China could benefit volumes, Glickman said the long-term trend of decoupling between the two countries will shape its network decisions. In place of the US-China trade, Glickman said Zim will direct its capacity at Southeast Asia and Latin America. For the first nine months of 2025, Zim saw its Latin America container volumes grow 10% while its intra-Asia volumes grew 8%. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Zim Integrated Shipping Services is preparing to route its ships through the Suez Canal, possibly as soon as 2026. The ocean carrier added that a return to Red Sea transits will further weaken freight rates, with Zim planning to return some chartered ships to reduce its fleet size. Chief Executive Eli Glickman said that the Israel-based Zim still needs the approval of its insurers and the owners of chartered vessels for a return to Suez routings. But “the current cease fire in Gaza is encouraging progress,” he said Thursday during the company’s third-quarter earnings conference call. Zim reported a 90% plunge in profits on weaker freight pricing. “We believe that a return to the Suez Canal in the near future now appears increasingly likely,” Glickman said. “We are preparing an operational plan to support this transition once the security situation has stabilized.” The Houthi rebels operating in Yemen earlier this month signaled they will pause attacks on Israel and commercial shipping, but would resume attacks in the Red Sea if the Gaza ceasefire ended. Glickman added that while the shorter route through the Suez Canal will mean lower operating costs, “it will also increase effective vessel supply currently tied up by longer routes around the Cape of Good Hope, adding pressure on freight rates.” Zim, which charters most of its 115 container ships from other owners, is reducing its fleet size in response to further rate pressure. The company returned 22 chartered ships so far in 2025, reducing its fleet capacity by some 80,000 TEUs. Another three charters are ending this year, while another 17 are up for renewal next year, amounting to another 80,000 TEUs of capacity Zim could shed. Chief Financial Officer Xavier Destriau said Zim used short-term charters on smaller Panamax ships to supplement its capacity throughout 2021 and 2022. Going forward, Destriau said Zim will lean more on its “core” fleet of 46 long-term chartered ships and 16-owned ships, which are primarily in the 8,000- to 11,500-TEU range. “I think 2025 was clearly a downward trend in terms of operated tonnage,” he said. “We need to acknowledge that the charter market is still elevated . So, it’s expensive to reach out the tonnage at a time when the revenue per TEU carried is under pressure.” Latin America, Southeast Asia trades in focus Zim reported third-quarter earnings of $1.02 per share, which was in line with analyst estimates but a 90% drop from the year-earlier quarter. The company largely stuck to its original full-year 2025 profit forecast. Third-quarter volumes decreased 4.5% from a year earlier to 926,000 TEUs. Its trans-Pacific volume was down slightly to 414,000 TEUs for the quarter. But its trans-Atlantic and intra-Mediterranean saw bigger respective drops of 27,000 TEUs and 21,000 TEUs for the quarter. Zim redirected intra-Mediterranean services away from Turkey in August due to that country’s ban on Israeli-linked shipping. The average rate Zim saw during the quarter was $1,602 per forty-foot equivalent unit, a 35% drop from a year earlier. While the current trade truce between the US and China could benefit volumes, Glickman said the long-term trend of decoupling between the two countries will shape its network decisions. In place of the US-China trade, Glickman said Zim will direct its capacity at Southeast Asia and Latin America. For the first nine months of 2025, Zim saw its Latin America container volumes grow 10% while its intra-Asia volumes grew 8%. Contact Michael Angell at michael.angell@spglobal.com .

Trans-Atlantic

Zim CEO sees ‘likely’ return to Suez Canal transits soon

<div class="phx-topic abstract-wrapper">Rising e-commerce volume out of Vietnam is being piled on top of sustained and heavy demand for high-tech shipments, with space on freighters in short supply.</div>

Rising e-commerce volume out of Vietnam is being piled on top of sustained and heavy demand for high-tech shipments, with space on freighters in short supply.

<div class="phx-topic">High demand in the US ahead of next week’s “Black Friday” online shopping promotion is squeezing available air freight space out of Asia and driving up rates. The demand is particularly high on Vietnam-US routes, with e-commerce volume being piled on top of sustained and heavy demand for high-tech shipments, with freighter capacity under growing pressure. While tightening capacity in the lead up to the official start of holiday shopping season is normal, the growing shipments from Vietnam reflect how importers are diversifying away from China amid the loss of a major demand driver: de minimis. Harsha Ranasinghe, global head of air logistics, customer and products at Kuehne + Nagel, said the forwarder is currently operating 14 freighter flights per week between Vietnam and the US. “The demand is driven primarily by high tech, electronics and semiconductor cargo,” he told the Journal of Commerce Thursday. “We expect this trend to continue as Vietnam has emerged as a leading global growth market. Thailand is also experiencing significant growth,” he added. In a trans-Pacific market update by Honour Lane Shipping, the Hong Kong-based forwarder noted that rates on direct flights from Southeast Asia to the US West Coast airports were as high as $7.50/kg, and up to $8.50/kg to the US East Coast. “On the Southeast Asia air freight market overall demand is very strong and sustained, space is critical and solar cell products and e-commerce [are] hot in Q4 from Vietnam, Thailand, Malaysia and Indonesia,” the market update noted. Rates on direct flights from Southeast Asia to the main hubs in Europe were reaching $6.80/kg, according to Honour Lane Shipping. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b6888bd9-e9f5-4f99-a176-3a5fb995e0e9"></dynamic-object></div>The available freighter capacity from Southeast Asia to the US was up 5% last week compared with an average of the previous four weeks, and up 9% on Southeast Asia-Europe routes, according to air freight analyst Rotate. A spokesperson for DHL Global Forwarding said the trends were “not out of the ordinary for this time of the year,” although he acknowledged “some elevated volume out of Vietnam and Thailand.” “But we don’t believe that this represents a ‘super peak’ at present, and that doesn’t seem to be reflected in rates and capacity,” he added. <h3>Solid China e-commerce growth </h3>Air cargo volume and rates out of China are also rising sharply, driven by continuing e-commerce demand despite the US removal of de minimis exemption for low-value items earlier this year. Honour Lane Shipping’s update said e-commerce cargo continues to dominate the China-US corridor with tight capacity on direct flights across the Pacific. “The rate for JFK [New York] direct flights is expected to reach $7–$7.20/kg by the end of this week, reflecting intense competition for capacity,” the market update noted, adding that the Chinese e-commerce platforms and some high-tech brands have secured space through charter flights. Air cargo rates for direct flights from China to Los Angeles’ LAX airport are expected to hold steady near $6.20/kg, which Honour Lane Shipping said indicates “a high and stable market level.” The Freightos Air Index shows China-US rates increased 5% last week to $6.60 per kilogram, up from less than $5/kg in early October and at its highest level this year as peak season demand grows. Last year, rates hit a high of $7.30/kg in mid-December. China-Europe prices increased 2% to $4.01/kg last week, up from the $3.50/kg level before Golden Week at the beginning of October. Ranasinghe said air freight rates were rising as demand ahead of Black Friday began to fill the available capacity out of Asia and the forwarder was working with the airlines to secure enough space to keep its shipments moving. Whether some of the demand was related to Christmas stockpiling was not yet clear, he added. “Until now, we have not seen significant demand that can be directly related to Christmas, though this will likely become more apparent post-Black Friday,” Ranasinghe said. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

High demand in the US ahead of next week’s “Black Friday” online shopping promotion is squeezing available air freight space out of Asia and driving up rates. The demand is particularly high on Vietnam-US routes, with e-commerce volume being piled on top of sustained and heavy demand for high-tech shipments, with freighter capacity under growing pressure. While tightening capacity in the lead up to the official start of holiday shopping season is normal, the growing shipments from Vietnam reflect how importers are diversifying away from China amid the loss of a major demand driver: de minimis. Harsha Ranasinghe, global head of air logistics, customer and products at Kuehne + Nagel, said the forwarder is currently operating 14 freighter flights per week between Vietnam and the US. “The demand is driven primarily by high tech, electronics and semiconductor cargo,” he told the Journal of Commerce Thursday. “We expect this trend to continue as Vietnam has emerged as a leading global growth market. Thailand is also experiencing significant growth,” he added. In a trans-Pacific market update by Honour Lane Shipping, the Hong Kong-based forwarder noted that rates on direct flights from Southeast Asia to the US West Coast airports were as high as $7.50/kg, and up to $8.50/kg to the US East Coast. “On the Southeast Asia air freight market overall demand is very strong and sustained, space is critical and solar cell products and e-commerce [are] hot in Q4 from Vietnam, Thailand, Malaysia and Indonesia,” the market update noted. Rates on direct flights from Southeast Asia to the main hubs in Europe were reaching $6.80/kg, according to Honour Lane Shipping. The available freighter capacity from Southeast Asia to the US was up 5% last week compared with an average of the previous four weeks, and up 9% on Southeast Asia-Europe routes, according to air freight analyst Rotate. A spokesperson for DHL Global Forwarding said the trends were “not out of the ordinary for this time of the year,” although he acknowledged “some elevated volume out of Vietnam and Thailand.” “But we don’t believe that this represents a ‘super peak’ at present, and that doesn’t seem to be reflected in rates and capacity,” he added. Solid China e-commerce growth Air cargo volume and rates out of China are also rising sharply, driven by continuing e-commerce demand despite the US removal of de minimis exemption for low-value items earlier this year. Honour Lane Shipping’s update said e-commerce cargo continues to dominate the China-US corridor with tight capacity on direct flights across the Pacific. “The rate for JFK [New York] direct flights is expected to reach $7–$7.20/kg by the end of this week, reflecting intense competition for capacity,” the market update noted, adding that the Chinese e-commerce platforms and some high-tech brands have secured space through charter flights. Air cargo rates for direct flights from China to Los Angeles’ LAX airport are expected to hold steady near $6.20/kg, which Honour Lane Shipping said indicates “a high and stable market level.” The Freightos Air Index shows China-US rates increased 5% last week to $6.60 per kilogram, up from less than $5/kg in early October and at its highest level this year as peak season demand grows. Last year, rates hit a high of $7.30/kg in mid-December. China-Europe prices increased 2% to $4.01/kg last week, up from the $3.50/kg level before Golden Week at the beginning of October. Ranasinghe said air freight rates were rising as demand ahead of Black Friday began to fill the available capacity out of Asia and the forwarder was working with the airlines to secure enough space to keep its shipments moving. Whether some of the demand was related to Christmas stockpiling was not yet clear, he added. “Until now, we have not seen significant demand that can be directly related to Christmas, though this will likely become more apparent post-Black Friday,” Ranasinghe said. Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo Forwarder News

Air Cargo

Black Friday demand tightens trans-Pacific air cargo capacity, elevates rates

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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 French carrier plans to enter the long-crimped trade lane via subsidiary brand CNC Line, with a targeted launch in January, market sources say.</div>

The French carrier plans to enter the long-crimped trade lane via subsidiary brand CNC Line, with a targeted launch in January, market sources say.

<div class="phx-topic">CMA CGM is in the final stages of laying out the operational framework to begin accepting container bookings from India to Russia as carriers search for incremental cargo opportunities to lift revenue and profitability amid multiple market challenges. The French carrier plans to enter the long-crimped trade lane via subsidiary brand CNC Line, with a targeted launch in January, market sources say. The strategy behind operating on a group arm bill of lading system instead of CMA CGM’s own contract of carriage/instrument is to limit potential operational and compliance risks from ongoing Western sanctions against Russia due to Moscow’s almost four-year-long war against Ukraine, sources believe. Founded in 1971, Singapore-headquartered CNC (formerly Cheng Lie Navigation Company) — a predominant intra-Asia operator — was acquired by CMA CGM in 2007. CMA CGM declined to comment on the matter when contacted by the Journal of Commerce. <h3>Transshipment options </h3>Current indications are that space will be allocated on CMA CGM’s India-Europe “Epic” service for Russian loading out of Nhava Sheva and Mundra with likely transshipment options over Hamburg. To that end, the carrier is said to be considering expanding its Finland Express (FLX) service with a new call to St. Petersburg, Russia’s main gateway port. The Baltic feeder now rotates Bremerhaven, Hamburg, Rauma, Tallinn, Kotka, Helsinki and Bremerhaven, available data shows. Mediterranean Shipping Co. is the only mainline carrier that has continued to provide coverage for Indian shipments to Russia on the back of multiple feeder networks between North Europe and Russia, including the Baltic Loop 02 that shuttles between Antwerp, Klaipeda, Kotka and St. Petersburg. Corten Shipping is one emerging secondary carrier on the India-Russia trade lane, offering two fortnightly direct connections out of Nhava Sheva/Kandla with three 1,500-TEU ships that boast transit times of 25 days to St. Petersburg and 18 days to Novorossiysk. Considering the typical limitations of sanctioned trades, pharmaceutical products as well as food and agricultural items are generally shipped to Russia, although some construction materials, mainly tiles, are also carried by ad-hoc vessel operators. Anecdotal industry data puts India-Russia container volumes at 8,000 TEUs a week. The freight yield is admittedly lucrative for capacity participants — pegged at $3,000 per TEU and $4,000 per FEU for dry cargo and $9,000 per FEU for reefer loads from Nhava Sheva to St. Petersburg. As US tariff-stricken Indian exporters and policy makers seek trade diversification, Russian volume gains are one option on the table. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>.</div>

CMA CGM is in the final stages of laying out the operational framework to begin accepting container bookings from India to Russia as carriers search for incremental cargo opportunities to lift revenue and profitability amid multiple market challenges. The French carrier plans to enter the long-crimped trade lane via subsidiary brand CNC Line, with a targeted launch in January, market sources say. The strategy behind operating on a group arm bill of lading system instead of CMA CGM’s own contract of carriage/instrument is to limit potential operational and compliance risks from ongoing Western sanctions against Russia due to Moscow’s almost four-year-long war against Ukraine, sources believe. Founded in 1971, Singapore-headquartered CNC (formerly Cheng Lie Navigation Company) — a predominant intra-Asia operator — was acquired by CMA CGM in 2007. CMA CGM declined to comment on the matter when contacted by the Journal of Commerce. Transshipment options Current indications are that space will be allocated on CMA CGM’s India-Europe “Epic” service for Russian loading out of Nhava Sheva and Mundra with likely transshipment options over Hamburg. To that end, the carrier is said to be considering expanding its Finland Express (FLX) service with a new call to St. Petersburg, Russia’s main gateway port. The Baltic feeder now rotates Bremerhaven, Hamburg, Rauma, Tallinn, Kotka, Helsinki and Bremerhaven, available data shows. Mediterranean Shipping Co. is the only mainline carrier that has continued to provide coverage for Indian shipments to Russia on the back of multiple feeder networks between North Europe and Russia, including the Baltic Loop 02 that shuttles between Antwerp, Klaipeda, Kotka and St. Petersburg. Corten Shipping is one emerging secondary carrier on the India-Russia trade lane, offering two fortnightly direct connections out of Nhava Sheva/Kandla with three 1,500-TEU ships that boast transit times of 25 days to St. Petersburg and 18 days to Novorossiysk. Considering the typical limitations of sanctioned trades, pharmaceutical products as well as food and agricultural items are generally shipped to Russia, although some construction materials, mainly tiles, are also carried by ad-hoc vessel operators. Anecdotal industry data puts India-Russia container volumes at 8,000 TEUs a week. The freight yield is admittedly lucrative for capacity participants — pegged at $3,000 per TEU and $4,000 per FEU for dry cargo and $9,000 per FEU for reefer loads from Nhava Sheva to St. Petersburg. As US tariff-stricken Indian exporters and policy makers seek trade diversification, Russian volume gains are one option on the table. Contact Bency Mathew at bencyvmathew@gmail.com .

CMA CGM poised to venture into India-Russia trade despite war sanctions

<div class="phx-topic abstract-wrapper">Eli Glickman’s buyout proposal first surfaced in Israeli media reports back in August, with his offer said to be about $20 per share, which would value Zim at $2.4 billion. </div>

Eli Glickman’s buyout proposal first surfaced in Israeli media reports back in August, with his offer said to be about $20 per share, which would value Zim at $2.4 billion.

<div class="phx-topic">Zim Integrated Shipping Services confirmed Tuesday it is reviewing buyout offers from several parties, including its chief executive. Zim said in a statement its board of directors has been reviewing a buyout proposal from Chief Executive Eli Glickman and Rami Ungar, who controls roll-on/roll-off carrier Ray Shipping, for several months. “In connection with this review, the ZIM board of directors has received indications of interest from multiple parties, including strategic interest, which it is evaluating carefully,” Zim said. “Strategic interest” generally means a bidder in the same industry, so Zim is at least alluding to another carrier as a potential interested party. As part of its review of the offers, Haifa-based Zim added two new board members, including Yair Avidan, a former bank executive, and Yoram Turbowicz, a former Israeli government executive. Zim has also hired investment bank Evercore as financial advisor and legal firms Meitar and Skadden, Arps. The ocean carrier said there’s no assurance a deal will be made, and that it would provide an update once the strategic review is completed. Glickman’s buyout proposal first surfaced in Israeli media reports back in August, with his offer said to be about $20 per share, which would value Zim at $2.4 billion. The carrier’s market valuation slipped to as low as $1.5 billion in mid-October amid the rout in freight rates. As of March 2025, Glickman owned about 1% of Zim. <h3>Carrier went public in 2021 </h3><a href="https://www.joc.com/article/zim-ceo-sees-likely-return-to-suez-canal-transits-soon-6120808">Zim reported a 90% year-over-year drop in third-quarter net income last week</a>, but still managed to beat analysts’ estimates and affirmed its previous 2025 profit forecast. Zim shares have risen 14% since its third-quarter earnings release. Zim made its public company debut in January 2021, raising $217.5 million and giving it an initial valuation of $1.3 billion. By March 2022 at the peak of the container shipping surge, the company reached a market value of $8.6 billion. Since its public offering, the carrier has leaned mostly on short-term chartering of Panamax ships that fit with its focus on express services. Zim has also contracted for its own newbuild ships and long-term charters of post-Panamax vessels and is currently in <a href="https://www.joc.com/article/decentralized-sourcing-plays-into-mscs-point-to-point-plans-ceo-5745884">a slot charter agreement with Mediterranean Shipping Co.</a> for trans-Pacific services. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Zim Integrated Shipping Services confirmed Tuesday it is reviewing buyout offers from several parties, including its chief executive. Zim said in a statement its board of directors has been reviewing a buyout proposal from Chief Executive Eli Glickman and Rami Ungar, who controls roll-on/roll-off carrier Ray Shipping, for several months. “In connection with this review, the ZIM board of directors has received indications of interest from multiple parties, including strategic interest, which it is evaluating carefully,” Zim said. “Strategic interest” generally means a bidder in the same industry, so Zim is at least alluding to another carrier as a potential interested party. As part of its review of the offers, Haifa-based Zim added two new board members, including Yair Avidan, a former bank executive, and Yoram Turbowicz, a former Israeli government executive. Zim has also hired investment bank Evercore as financial advisor and legal firms Meitar and Skadden, Arps. The ocean carrier said there’s no assurance a deal will be made, and that it would provide an update once the strategic review is completed. Glickman’s buyout proposal first surfaced in Israeli media reports back in August, with his offer said to be about $20 per share, which would value Zim at $2.4 billion. The carrier’s market valuation slipped to as low as $1.5 billion in mid-October amid the rout in freight rates. As of March 2025, Glickman owned about 1% of Zim. Carrier went public in 2021 Zim reported a 90% year-over-year drop in third-quarter net income last week , but still managed to beat analysts’ estimates and affirmed its previous 2025 profit forecast. Zim shares have risen 14% since its third-quarter earnings release. Zim made its public company debut in January 2021, raising $217.5 million and giving it an initial valuation of $1.3 billion. By March 2022 at the peak of the container shipping surge, the company reached a market value of $8.6 billion. Since its public offering, the carrier has leaned mostly on short-term chartering of Panamax ships that fit with its focus on express services. Zim has also contracted for its own newbuild ships and long-term charters of post-Panamax vessels and is currently in a slot charter agreement with Mediterranean Shipping Co. for trans-Pacific services. Contact Michael Angell at michael.angell@spglobal.com .

Zim says reviewing buyout offers, including one from CEO

<div class="phx-topic abstract-wrapper">The National Association of Waterfront Employers said intermodal service from ports could degrade further unless service commitments are made in the proposed $85 billion deal. </div>

The National Association of Waterfront Employers said intermodal service from ports could degrade further unless service commitments are made in the proposed $85 billion deal.

<div class="phx-topic">The National Association of Waterfront Employers (NAWE) became the first group in ocean freight to weigh in on the proposed merger of Union Pacific and Norfolk Southern, arguing a combined railroad could mean less competition and further erosion in intermodal service reliability at US ports.In a Dec. 1 letter to the US Surface Transportation Board (STB), NAWE said its members are concerned that reducing the number of Class I railroads through UP’s $85 billion acquisition of NS will further degrade intermodal service at ports. “Marine terminals need an intermodal rail service to handle increasing volumes of trade in order to provide streamlined imports and exports from increasingly strained port complexes,” NAWE’s letter said. “We are greatly concerned as to whether a reduction of two of the four major remaining competitors offering intermodal rail service will serve to benefit our industry.” NAWE, which represents marine terminals and stevedoring companies, said that Class I railroads, in general, are only taking a “best efforts” approach to providing intermodal service at ports. The group said the railroad industry’s focus on maintaining high operating ratios and “precision scheduled railroading” means less reliable intermodal service. Instead, railroads are leaving it to port operators and marine terminals to invest in rail operations “while the railroad usually takes more of an ‘if you build it, I may carry your cargo, if I see fit,’ approach,” NAWE’s letter said. “This results in a situation where the marine terminal industry finances and manages all the placement of intermodal on-dock rail transport, sometimes with very little in return on commitments in level of service,” the group wrote to STB, the federal regulator who will ultimately decide the fate of the proposed merger.<h3>Argues for intermodal growth at smaller ports</h3>Ocean carriers and ports have generally avoided public comments on the merger plans. NAWE said many of its members have good working relationships with the railroads, but it sees more potential for intermodal services to expand outside of larger ports by offering shippers more reach through less crowded gateways. The combination of two Class I railroads serving both coasts will further concentrate international intermodal freight at already busy ports, it said. “We need intermodal railroad services that expand the reach and capacity of medium-sized ports so they grow, but more fundamentally, we need to build a stronger business partnership with the railroads,” NAWE said. “Other port areas of the nation continue to struggle for commitment of service and greater level of investment to help spur growth.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

The National Association of Waterfront Employers (NAWE) became the first group in ocean freight to weigh in on the proposed merger of Union Pacific and Norfolk Southern, arguing a combined railroad could mean less competition and further erosion in intermodal service reliability at US ports. In a Dec. 1 letter to the US Surface Transportation Board (STB), NAWE said its members are concerned that reducing the number of Class I railroads through UP’s $85 billion acquisition of NS will further degrade intermodal service at ports. “Marine terminals need an intermodal rail service to handle increasing volumes of trade in order to provide streamlined imports and exports from increasingly strained port complexes,” NAWE’s letter said. “We are greatly concerned as to whether a reduction of two of the four major remaining competitors offering intermodal rail service will serve to benefit our industry.” NAWE, which represents marine terminals and stevedoring companies, said that Class I railroads, in general, are only taking a “best efforts” approach to providing intermodal service at ports. The group said the railroad industry’s focus on maintaining high operating ratios and “precision scheduled railroading” means less reliable intermodal service. Instead, railroads are leaving it to port operators and marine terminals to invest in rail operations “while the railroad usually takes more of an ‘if you build it, I may carry your cargo, if I see fit,’ approach,” NAWE’s letter said. “This results in a situation where the marine terminal industry finances and manages all the placement of intermodal on-dock rail transport, sometimes with very little in return on commitments in level of service,” the group wrote to STB, the federal regulator who will ultimately decide the fate of the proposed merger. Argues for intermodal growth at smaller ports Ocean carriers and ports have generally avoided public comments on the merger plans. NAWE said many of its members have good working relationships with the railroads, but it sees more potential for intermodal services to expand outside of larger ports by offering shippers more reach through less crowded gateways. The combination of two Class I railroads serving both coasts will further concentrate international intermodal freight at already busy ports, it said. “We need intermodal railroad services that expand the reach and capacity of medium-sized ports so they grow, but more fundamentally, we need to build a stronger business partnership with the railroads,” NAWE said. “Other port areas of the nation continue to struggle for commitment of service and greater level of investment to help spur growth.” Contact Michael Angell at michael.angell@spglobal.com .

Ports urge strict review of intermodal impacts from UP-NS merger

<div class="phx-topic abstract-wrapper">The railroad says the appointment system will create more “predictable operations” by controlling the number of containers that are in-gated each day.</div>

The railroad says the appointment system will create more “predictable operations” by controlling the number of containers that are in-gated each day.

<div class="phx-topic">Norfolk Southern Railway (NS) has begun requiring truck drivers to make reservations to drop off domestic intermodal loads, with a system-wide rollout of the program scheduled to continue through March. As of Dec. 1, drivers must secure a reservation to deliver domestic containers to the NS terminal in Charlotte, North Carolina. Reservations are now also required in Atlanta; Columbus, Ohio; Jacksonville, Florida.; Kansas City, Missouri; Memphis and St. Louis after a “soft” rollout of the appointment system over the past few months, NS said, adding that one additional terminal will be added each week for the next 16 weeks. “We softly rolled [our mandatory appointment system] out for domestic [intermodal] in a handful of lanes, mostly between Chicago and New England,” Norfolk Southern said in a statement to intermodal partners that was seen by the Journal of Commerce. “After a year’s worth of testing and systems enhancements, we will be rolling [it] out systemwide.” The railroad says the reservation system will create more “predictable operations.” By controlling the number of containers that are in-gated each day, NS says it can reduce so-called origin dwell, or how long a container sits before being loaded on a train. Lower dwell times prevent terminals from becoming congested and preserve capacity to unload inbound trains quickly, according to the railroad. “By reducing variability and enhancing operational predictability, we aim to deliver better service and support to our customers,” NS said in the advisory. Key rollout dates ahead include Dec. 8 in Philadelphia; Feb. 2 in Harrisburg, Pennsylvania; Feb. 9 in Newark (Croxton), New Jersey; and Feb. 23 at Chicago’s 47th Street terminal. International intermodal customers already use a reservation system at several NS hubs, including Atlanta, Memphis and Chicago. BNSF Railway is now the only Class I North American railroad that does not require reservations for domestic intermodal drop-offs. <h3>Extra step for IMCs </h3>NS will host information sessions across its network to brief motor carriers and intermodal marketing companies (IMCs) on the new requirements. Sessions are scheduled in Cincinnati on Dec. 10 and Louisville on Dec. 11, ahead of those markets adopting the reservations system in mid-January. The change adds a planning step for IMCs to ensure loads depart on time by booking and providing reservation numbers to third-party drayage carriers. During peak periods, NS may also cap how many containers an IMC can ingate daily, potentially delaying some shipments. High-volume IMCs will receive a daily allocation of reservation slots per terminal. Once that allotment is exceeded, IMCs must use an open pool of remaining slots on a first-come, first-served basis. CSX Transportation — NS’ chief competitor in the eastern US domestic market — has used a similar reservation system since 2019. During the pandemic-era freight surge, reservation slots at times filled for days in Chicago and other hubs, leaving IMCs waiting to ingate containers. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Norfolk Southern Railway (NS) has begun requiring truck drivers to make reservations to drop off domestic intermodal loads, with a system-wide rollout of the program scheduled to continue through March. As of Dec. 1, drivers must secure a reservation to deliver domestic containers to the NS terminal in Charlotte, North Carolina. Reservations are now also required in Atlanta; Columbus, Ohio; Jacksonville, Florida.; Kansas City, Missouri; Memphis and St. Louis after a “soft” rollout of the appointment system over the past few months, NS said, adding that one additional terminal will be added each week for the next 16 weeks. “We softly rolled [our mandatory appointment system] out for domestic [intermodal] in a handful of lanes, mostly between Chicago and New England,” Norfolk Southern said in a statement to intermodal partners that was seen by the Journal of Commerce. “After a year’s worth of testing and systems enhancements, we will be rolling [it] out systemwide.” The railroad says the reservation system will create more “predictable operations.” By controlling the number of containers that are in-gated each day, NS says it can reduce so-called origin dwell, or how long a container sits before being loaded on a train. Lower dwell times prevent terminals from becoming congested and preserve capacity to unload inbound trains quickly, according to the railroad. “By reducing variability and enhancing operational predictability, we aim to deliver better service and support to our customers,” NS said in the advisory. Key rollout dates ahead include Dec. 8 in Philadelphia; Feb. 2 in Harrisburg, Pennsylvania; Feb. 9 in Newark (Croxton), New Jersey; and Feb. 23 at Chicago’s 47th Street terminal. International intermodal customers already use a reservation system at several NS hubs, including Atlanta, Memphis and Chicago. BNSF Railway is now the only Class I North American railroad that does not require reservations for domestic intermodal drop-offs. Extra step for IMCs NS will host information sessions across its network to brief motor carriers and intermodal marketing companies (IMCs) on the new requirements. Sessions are scheduled in Cincinnati on Dec. 10 and Louisville on Dec. 11, ahead of those markets adopting the reservations system in mid-January. The change adds a planning step for IMCs to ensure loads depart on time by booking and providing reservation numbers to third-party drayage carriers. During peak periods, NS may also cap how many containers an IMC can ingate daily, potentially delaying some shipments. High-volume IMCs will receive a daily allocation of reservation slots per terminal. Once that allotment is exceeded, IMCs must use an open pool of remaining slots on a first-come, first-served basis. CSX Transportation — NS’ chief competitor in the eastern US domestic market — has used a similar reservation system since 2019. During the pandemic-era freight surge, reservation slots at times filled for days in Chicago and other hubs, leaving IMCs waiting to ingate containers. Contact Ari Ashe at ari.ashe@spglobal.com .

Norfolk Southern to roll out reservation system on domestic intermodal

<div class="phx-topic abstract-wrapper">While liners will remain in the black this year, the growing capacity overhang and weak demand expectations will undermine rate-increasing efforts through 2026, analysts say. </div>

While liners will remain in the black this year, the growing capacity overhang and weak demand expectations will undermine rate-increasing efforts through 2026, analysts say.

<div class="phx-topic">A shift in the supply-demand balance in container shipping dragged down the financial results of ocean carriers in the third quarter, and maritime experts see nothing in market conditions to change their view that the industry’s multi-year profitability voyage will end in 2026. Global fleet capacity is forecast to grow 6.9% to 32.97 million TEUs this year and by another 2.2% in 2026 to 33.7 million TEUs, according to Drewry Shipping Consultants, and Bimco expects global container volume growth of between 2.5% and 3.5% in both years. While carriers will remain in the black this year thanks in large part to a strong first half that is already in the bank, full-year operating profit will be near $20 billion for 2025 compared with more than $60 billion last year, Drewry noted. But the maritime consultant is predicting industry losses will top $10 billion in 2026. The sharp drop in revenue and profits in the third quarter was dramatic across the board. Revenue among the 11 carriers that report their turnover showed a third-quarter drop of $44 billion, down 22% compared with the revenue earned in the third quarter of last year, Sea-Intelligence Maritime Analysis noted in its latest Sunday Spotlight Newsletter. Despite volume gains across most of the carriers, the combined earnings before interest and taxes (EBIT) in the third quarter fell sharply year over year — from $17.06 billion to $5.12 billion. However, Sea-Intelligence emphasized that although the 2024 peak has passed, the EBIT floor has not yet fallen to pre-COVID 2019 levels. The analyst said shipping lines also recorded a double-digit year-over-year contraction in average freight rates in the third quarter as the market corrected from the disruption-driven highs of the previous year. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="17f49652-207f-4ee9-9c2c-09b39b5b158e"></dynamic-object></div>The landing will be particularly hard on the trans-Pacific. After a year of US importers frontloading shipments out of fear of higher tariffs as American consumers become more cautious, <a href="https://www.joc.com/article/slump-of-us-imports-from-asia-deepening-6120860">replenishment of inventories is being handled judiciously</a>. US retailers <a href="https://www.joc.com/article/us-retailers-throttle-back-on-imports-amid-uncertain-consumer-sentiment-6111471">are forecasting double-digit percentage declines</a> in November and December, and monthly volumes are not expected to exceed 2 million TEUs through March, according to the latest Global Port Tracker, produced by Hackett Associates and the National Retail Federation. Drewry is expecting that the negative growth in Asia-North America volume in the fourth quarter will continue into the first three months of 2026, with zero growth on the trans-Pacific for the full year. “Our assessment is that the US container boom of 2023 to late 2025 is truly over,” Drewry noted in its Container Forecaster report. Moody’s Ratings has forecast that US container volumes in 2026 will show growth between 0% to minus 2% year over year. <h3>Significant rate erosion expected </h3>The grim market outlook was shared by transportation analysts at J.P. Morgan, who noted in a report this week following Zim Integrated Shipping’s third-quarter results that a demand-supply analysis of the trans-Pacific pointed to significant freight rate erosion in 2026 and 2027. Zim is heavily exposed to the trans-Pacific trade lane, where the rate dropped 45% year over year in the third quarter. “We expect it is unlikely for rates to strengthen structurally into 2026, unless there is material supply that comes out of the market — scrapping and idling remain extremely low — or there is an acceleration in demand, which again appears less likely, given the strength in year-to-date volume growth of 5% year over year,” J.P. Morgan said in its outlook. Spot rates from Asia to the US West Coast, as measured by various indexes, are down 30% to 60% year over year, depending on the index and trade lane. Data from rate benchmarking platform Xeneta shows that average short-term rates on the Asia-US West Coast lane of $1,482 per FEU as of Tuesday are down 70% since the first week of July. The picture on Asia-Europe is not as gloomy as the trans-Pacific — at least not yet — with carriers on trade lanes to North Europe and the Mediterranean managing to cling to some of the rate increases that have been levied on the market every two weeks since early October. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="f42506cc-5dcf-4f07-afda-28027dacc172"></dynamic-object></div>Short-term rates are up more than 20% since Oct. 1 at $2,349/FEU as of Monday, according to Xeneta, and have held on to gains through November as carriers blank sailings to better match capacity with demand. Stefan Verberckmoes, senior shipping analyst at Alphaliner, said the rate increases were more successful on Asia-Europe than on the trans-Pacific because of carriers renegotiating contracts between Asia and Europe. “Carriers are putting more effort into keeping spot freight rates up there as it affects talks with beneficial cargo owners [while] annual contract negotiations on the trans-Pacific are for next year with many contracts starting again in May,” Verberckmoes told the Journal of Commerce. Blank sailings are a popular tool in the carriers’ capacity management bag and are being used to good effect on Asia-Europe. Carriers have announced November blanks of almost 110,000 TEUs of capacity, with blank sailings already at 83,000 TEUs for December, according to Xeneta’s eeSea data. Both of those numbers are expected to increase. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

A shift in the supply-demand balance in container shipping dragged down the financial results of ocean carriers in the third quarter, and maritime experts see nothing in market conditions to change their view that the industry’s multi-year profitability voyage will end in 2026. Global fleet capacity is forecast to grow 6.9% to 32.97 million TEUs this year and by another 2.2% in 2026 to 33.7 million TEUs, according to Drewry Shipping Consultants, and Bimco expects global container volume growth of between 2.5% and 3.5% in both years. While carriers will remain in the black this year thanks in large part to a strong first half that is already in the bank, full-year operating profit will be near $20 billion for 2025 compared with more than $60 billion last year, Drewry noted. But the maritime consultant is predicting industry losses will top $10 billion in 2026. The sharp drop in revenue and profits in the third quarter was dramatic across the board. Revenue among the 11 carriers that report their turnover showed a third-quarter drop of $44 billion, down 22% compared with the revenue earned in the third quarter of last year, Sea-Intelligence Maritime Analysis noted in its latest Sunday Spotlight Newsletter. Despite volume gains across most of the carriers, the combined earnings before interest and taxes (EBIT) in the third quarter fell sharply year over year — from $17.06 billion to $5.12 billion. However, Sea-Intelligence emphasized that although the 2024 peak has passed, the EBIT floor has not yet fallen to pre-COVID 2019 levels. The analyst said shipping lines also recorded a double-digit year-over-year contraction in average freight rates in the third quarter as the market corrected from the disruption-driven highs of the previous year. The landing will be particularly hard on the trans-Pacific. After a year of US importers frontloading shipments out of fear of higher tariffs as American consumers become more cautious, replenishment of inventories is being handled judiciously . US retailers are forecasting double-digit percentage declines in November and December, and monthly volumes are not expected to exceed 2 million TEUs through March, according to the latest Global Port Tracker, produced by Hackett Associates and the National Retail Federation. Drewry is expecting that the negative growth in Asia-North America volume in the fourth quarter will continue into the first three months of 2026, with zero growth on the trans-Pacific for the full year. “Our assessment is that the US container boom of 2023 to late 2025 is truly over,” Drewry noted in its Container Forecaster report. Moody’s Ratings has forecast that US container volumes in 2026 will show growth between 0% to minus 2% year over year. Significant rate erosion expected The grim market outlook was shared by transportation analysts at J.P. Morgan, who noted in a report this week following Zim Integrated Shipping’s third-quarter results that a demand-supply analysis of the trans-Pacific pointed to significant freight rate erosion in 2026 and 2027. Zim is heavily exposed to the trans-Pacific trade lane, where the rate dropped 45% year over year in the third quarter. “We expect it is unlikely for rates to strengthen structurally into 2026, unless there is material supply that comes out of the market — scrapping and idling remain extremely low — or there is an acceleration in demand, which again appears less likely, given the strength in year-to-date volume growth of 5% year over year,” J.P. Morgan said in its outlook. Spot rates from Asia to the US West Coast, as measured by various indexes, are down 30% to 60% year over year, depending on the index and trade lane. Data from rate benchmarking platform Xeneta shows that average short-term rates on the Asia-US West Coast lane of $1,482 per FEU as of Tuesday are down 70% since the first week of July. The picture on Asia-Europe is not as gloomy as the trans-Pacific — at least not yet — with carriers on trade lanes to North Europe and the Mediterranean managing to cling to some of the rate increases that have been levied on the market every two weeks since early October. Short-term rates are up more than 20% since Oct. 1 at $2,349/FEU as of Monday, according to Xeneta, and have held on to gains through November as carriers blank sailings to better match capacity with demand. Stefan Verberckmoes, senior shipping analyst at Alphaliner, said the rate increases were more successful on Asia-Europe than on the trans-Pacific because of carriers renegotiating contracts between Asia and Europe. “Carriers are putting more effort into keeping spot freight rates up there as it affects talks with beneficial cargo owners [while] annual contract negotiations on the trans-Pacific are for next year with many contracts starting again in May,” Verberckmoes told the Journal of Commerce. Blank sailings are a popular tool in the carriers’ capacity management bag and are being used to good effect on Asia-Europe. Carriers have announced November blanks of almost 110,000 TEUs of capacity, with blank sailings already at 83,000 TEUs for December, according to Xeneta’s eeSea data. Both of those numbers are expected to increase. Contact Greg Knowler at greg.knowler@spglobal.com .

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