<div class="phx-topic abstract-wrapper">Kurt Slocombe will guide the Western Canadian port in completing a transload and logistics facility, channeling a boom in commodity exports, and recovering volume share lost during the pandemic. </div>

Kurt Slocombe will guide the Western Canadian port in completing a transload and logistics facility, channeling a boom in commodity exports, and recovering volume share lost during the pandemic.

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<div class="phx-topic">The Prince Rupert Port Authority has promoted one of its executives to become the agency’s next president and CEO, it announced Thursday. Kurt Slocombe joined the PRPA in 2019 as vice president of operations, planning and infrastructure. But his ties to Prince Rupert go back to 2007 when he took on management roles at the then newly revamped Fairview Container Terminal. As head of the PRPA, Slocombe will guide the port in completing a transload and logistics facility, channeling a boom in commodity exports, and recovering volume share lost during the pandemic. Slocombe has served as PRPA’s interim president since his predecessor, Shaun Stevenson, left at the end of 2025. “Kurt’s understanding of our operations and long-standing commitment to the Prince Rupert community qualify him to lead the team,” Peter Lantin, chairman of the Prince Rupert Port Authority Board of Directors, said in a statement. Container volumes, including empties, through Prince Rupert jumped 20% year over year in 2025 to 885,797 TEUs. Prince Rupert and Vancouver grew their combined volumes 19.8% year over year in the 2025 fourth quarter, while volumes through US West Coast ports fell 10.1% during the same period, according to a February analysis by Sea-Intelligence Maritime Analysis. “The recovery was led by Prince Rupert, which saw a 46.1% surge in Q4 volume,” Sea-Intelligence said. “The data suggests that the ‘reverse diversion’ trend of 2024 was a temporary risk-mitigation strategy; as US frontloaded demand cooled, shippers returned discretionary cargo to Canadian ports in (the fourth quarter).” <a href="mailto:News@joc.com">News@joc.com.</a></div>

The Prince Rupert Port Authority has promoted one of its executives to become the agency’s next president and CEO, it announced Thursday. Kurt Slocombe joined the PRPA in 2019 as vice president of operations, planning and infrastructure. But his ties to Prince Rupert go back to 2007 when he took on management roles at the then newly revamped Fairview Container Terminal. As head of the PRPA, Slocombe will guide the port in completing a transload and logistics facility, channeling a boom in commodity exports, and recovering volume share lost during the pandemic. Slocombe has served as PRPA’s interim president since his predecessor, Shaun Stevenson, left at the end of 2025. “Kurt’s understanding of our operations and long-standing commitment to the Prince Rupert community qualify him to lead the team,” Peter Lantin, chairman of the Prince Rupert Port Authority Board of Directors, said in a statement. Container volumes, including empties, through Prince Rupert jumped 20% year over year in 2025 to 885,797 TEUs. Prince Rupert and Vancouver grew their combined volumes 19.8% year over year in the 2025 fourth quarter, while volumes through US West Coast ports fell 10.1% during the same period, according to a February analysis by Sea-Intelligence Maritime Analysis. “The recovery was led by Prince Rupert, which saw a 46.1% surge in Q4 volume,” Sea-Intelligence said. “The data suggests that the ‘reverse diversion’ trend of 2024 was a temporary risk-mitigation strategy; as US frontloaded demand cooled, shippers returned discretionary cargo to Canadian ports in (the fourth quarter).” News@joc.com.

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Veteran PRPA, Fairview terminal executive to lead Prince Rupert port

<div class="phx-topic abstract-wrapper">While fuel prices have historically served as a tailwind for modal conversion, in and of itself, it is insufficient to guarantee success, writes Ted Prince.</div>

While fuel prices have historically served as a tailwind for modal conversion, in and of itself, it is insufficient to guarantee success, writes Ted Prince.

<div class="phx-topic">Rising diesel prices have given encouragement to intermodal enthusiasts who view this as preceding inevitable success. Yes, fuel disproportionately increases truck cost-per-mile more than rail; however, this optimism is not new — it has been extant since the fuel crises of 1973 and 1979. While fuel prices have historically served as a tailwind for modal conversion, in and of itself, it is insufficient to guarantee success. Intermodal success ultimately depends less on fuel and more on demand patterns, balance, drayage dynamics and loading characteristics. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6198450_0.1.jpg"></img></div>Microeconomics states that substitute goods are perceived by consumers as similar. They have the same or similar performance characteristics, have the same or similar occasion for use, and they are sold in the same geographic area. Whereas trucks can go anywhere, intermodal cannot, so while truck can always substitute for intermodal, the converse is not true. Intermodal has a lower cost-per-mile than truck; however, it has a higher fixed cost. So a general rule-of-thumb is that intermodal is cheaper for long distances. This threshold frequently varies between 600 and 1,200 miles. Intermodal also results in lower emissions. Unfortunately, this aspect seems less important than in the past. (Most shippers’ sense of green is cost.) Intermodal, like truckload, has been subject to a number of inflationary pressures. And while many are similar, they vary in their materiality to delivered cost. Rather, when considering how intermodal competes with truckload, you need to consider the nature of the cargo, specifically: demand, balance and load configuration. Is volume the same day in and day out throughout the year? If so, it will be very attractive to truck that puts a premium on closely aligning supply and demand. The more asymmetrical the demand, the better it is for intermodal to absorb the surge and withstand the trough. The time frame can be anywhere from seasonal to day-of-the-week. Consider a shipper with 10 loads per week. Are there two loads every weekday or one on Wednesday, two on Thursday and seven on Friday? The latter is much more attractive to intermodal. Loaded vs. empty miles Traffic balance reflects the difference in loaded and empty miles over the portfolio of loads. Markets that are imbalanced command a pricing premium to compensate for evacuation of capacity to or from the next load. The greater the imbalance, the greater the premium charged on the loaded portion. Loaded miles generate revenue; empty miles do not. However, for trucks, empty miles cost almost as much as loaded miles. Traditionally, there is a much wider cost disparity in intermodal loaded and empty cost. This is attributable more to rail pricing. In an extreme case, intermodal can support 100% empty miles. Examples would include Chicago-Boston (load-empty) and Los Angeles-Chicago (empty-load). Although intermodal can withstand empty imbalance more effectively than truck, there is an additional balance issue for the intermodal drayage pickup/delivery. The same truck economics apply, so a drayage round trip with two loads will have a lower cost than one that is empty in one direction. Rail miles are usually greater than truck miles. This extra time and distance increases door-to-door transit times versus a more direct truck route, slowing intermodal shipments. Also, whereas truck is always a straight line, intermodal has three distinct segments. Terminal location and schedules determine the effective rail market area. Having to dray in the opposite direction of the freight is a challenge. (e.g., Cargo from Cedar Rapids trucked east to Chicago to go west to Los Angeles.) The final factor is how the load and customer interface are configured — and its impact on drayage. A 2,000-mile length of haul will entail 72 to 96 hours for a single driver, who may well be sleeping in their truck when hours of service expire. However, a drayage move is only three to five hours. When considered as a percentage of their transaction time, multiple hours spent at the dock may be acceptable to the truck driver but not the intermodal drayman. The same intermodal obstacle applies to multiple stops. And in some cases, the multiple stops may be extended over hundreds of miles. Intermodal’s sweet spot is a single-stop drop-and-hook move. Live loading (“stay with”) is more problematic for the drayage driver, and “first come-first served” is even more dreaded. This reduces the addressable market suitable for conversion. There is no doubt that fuel prices will help intermodal volume; however, the successful operators will be those that recognize intermodal’s strong suits and play to them. Customers looking for truck alternatives will find collaborative ways to make their cargo work for intermodal. That will ensure a growth future. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com.</a></div>

Rising diesel prices have given encouragement to intermodal enthusiasts who view this as preceding inevitable success. Yes, fuel disproportionately increases truck cost-per-mile more than rail; however, this optimism is not new — it has been extant since the fuel crises of 1973 and 1979. While fuel prices have historically served as a tailwind for modal conversion, in and of itself, it is insufficient to guarantee success. Intermodal success ultimately depends less on fuel and more on demand patterns, balance, drayage dynamics and loading characteristics. Microeconomics states that substitute goods are perceived by consumers as similar. They have the same or similar performance characteristics, have the same or similar occasion for use, and they are sold in the same geographic area. Whereas trucks can go anywhere, intermodal cannot, so while truck can always substitute for intermodal, the converse is not true. Intermodal has a lower cost-per-mile than truck; however, it has a higher fixed cost. So a general rule-of-thumb is that intermodal is cheaper for long distances. This threshold frequently varies between 600 and 1,200 miles. Intermodal also results in lower emissions. Unfortunately, this aspect seems less important than in the past. (Most shippers’ sense of green is cost.) Intermodal, like truckload, has been subject to a number of inflationary pressures. And while many are similar, they vary in their materiality to delivered cost. Rather, when considering how intermodal competes with truckload, you need to consider the nature of the cargo, specifically: demand, balance and load configuration. Is volume the same day in and day out throughout the year? If so, it will be very attractive to truck that puts a premium on closely aligning supply and demand. The more asymmetrical the demand, the better it is for intermodal to absorb the surge and withstand the trough. The time frame can be anywhere from seasonal to day-of-the-week. Consider a shipper with 10 loads per week. Are there two loads every weekday or one on Wednesday, two on Thursday and seven on Friday? The latter is much more attractive to intermodal. Loaded vs. empty miles Traffic balance reflects the difference in loaded and empty miles over the portfolio of loads. Markets that are imbalanced command a pricing premium to compensate for evacuation of capacity to or from the next load. The greater the imbalance, the greater the premium charged on the loaded portion. Loaded miles generate revenue; empty miles do not. However, for trucks, empty miles cost almost as much as loaded miles. Traditionally, there is a much wider cost disparity in intermodal loaded and empty cost. This is attributable more to rail pricing. In an extreme case, intermodal can support 100% empty miles. Examples would include Chicago-Boston (load-empty) and Los Angeles-Chicago (empty-load). Although intermodal can withstand empty imbalance more effectively than truck, there is an additional balance issue for the intermodal drayage pickup/delivery. The same truck economics apply, so a drayage round trip with two loads will have a lower cost than one that is empty in one direction. Rail miles are usually greater than truck miles. This extra time and distance increases door-to-door transit times versus a more direct truck route, slowing intermodal shipments. Also, whereas truck is always a straight line, intermodal has three distinct segments. Terminal location and schedules determine the effective rail market area. Having to dray in the opposite direction of the freight is a challenge. (e.g., Cargo from Cedar Rapids trucked east to Chicago to go west to Los Angeles.) The final factor is how the load and customer interface are configured — and its impact on drayage. A 2,000-mile length of haul will entail 72 to 96 hours for a single driver, who may well be sleeping in their truck when hours of service expire. However, a drayage move is only three to five hours. When considered as a percentage of their transaction time, multiple hours spent at the dock may be acceptable to the truck driver but not the intermodal drayman. The same intermodal obstacle applies to multiple stops. And in some cases, the multiple stops may be extended over hundreds of miles. Intermodal’s sweet spot is a single-stop drop-and-hook move. Live loading (“stay with”) is more problematic for the drayage driver, and “first come-first served” is even more dreaded. This reduces the addressable market suitable for conversion. There is no doubt that fuel prices will help intermodal volume; however, the successful operators will be those that recognize intermodal’s strong suits and play to them. Customers looking for truck alternatives will find collaborative ways to make their cargo work for intermodal. That will ensure a growth future. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at ted@tricitiesintermodal.com.

Truckload

North-American rail

International rail

Surface

Jump in diesel prices alone not enough to boost intermodal fortunes – analyst

<div class="phx-topic abstract-wrapper">With more than 50% of the city-state's bunker fuel imported via the Strait of Hormuz, which has been effectively closed since the war started on Feb. 28, suppliers are feeling the pinch.</div>

With more than 50% of the city-state's bunker fuel imported via the Strait of Hormuz, which has been effectively closed since the war started on Feb. 28, suppliers are feeling the pinch.

<div class="phx-topic">Suppliers in the world’s largest bunkering hub of Singapore are under growing stress, with analysts reporting less than a month’s supply remaining and no replenishment in sight from one of its most important fuel supply lines. More than 50% of the city-state's bunker fuel is believed to be imported via the Strait of Hormuz, which has been effectively closed since the war in the Middle East started on Feb. 28. Although Singapore remains able to refuel ships, the clock is ticking on the available supply, according to Fotios Katsoulas, director and head of tankers, freight and alternative fuels research at S&amp;P Global Energy. "If the current supply-demand imbalance persists, we expect a rapid acceleration in stock drawdowns as existing inventories — currently sufficient for about three weeks of typical demand — begin to deplete,” he said. S&amp;P Global is the parent company of the Journal of Commerce. Katsoulas said the Singapore market was under “significant stress,” with recommended lead times for ocean carriers replenishing very low sulfur fuel oil (VLSFO) currently stretching to more than a week in some cases. “Prompt availability is extremely tight,” he said. “We are seeing reports of suppliers already prioritizing existing term contracts and resisting new tenders for the next (few) months.” The immense scale of Singapore’s bunkering industry underlines the problem facing fuel suppliers in the port should the Strait of Hormuz remain closed. Singapore sold 56.2 million metric tons (mt) of bunker fuel in 2025, up 3.2% year over year, according to data from the Maritime and Port Authority of Singapore. That was more than five times the bunker sales at the world’s second-largest ship refueling hub of Rotterdam, with sales driven by strong high sulfur fuel oil (HSFO) demand as VLSFO sales dropped off. Traders in Singapore have been sourcing oil from areas outside the Middle East, such as Brazil and Russia, according to reports. The US in March issued a 30-day waiver allowing the purchase of previously sanctioned Russian oil and gas, and Singapore is taking advantage of that by increasing imports to support bunker availability. <h3>Fuel prices drop off mid-March highs </h3>The scarcity of supply since Feb. 28 has pushed up bunker fuel prices in Singapore, but prices have declined since the mid-March highs. On April 1, VLSFO in Singapore was selling at $873.50 per metric ton, up 70% since Feb. 27 but far below its March 16 high of $1,119/mt, according to the Ship &amp; Bunker platform. HSFO has followed a similar path, up 60% from Feb. 27 at $695/mt, but down 35% from the March 9 price of $1,073/mt. Bucking the trend is low sulfur marine gas oil (MGO), used by carriers in emission control areas such as the coasts of North America, the Caribbean, the Baltic and North seas, and the Mediterranean. MGO prices in Singapore on April 1 were at $1,836/mt, not far off the March 23 high of $1,940, but 160% above the pre-war price, Ship &amp; Bunker data showed. In Rotterdam, VLSFO was trading at $716.50/mt on April 1, up almost 50% from Feb. 27. HSFO was at $661.50, up 50% since before the war, while MGO was 85% higher at $1,331/mt, Ship &amp; Bunker’s latest pricing showed. Katsoulas said Rotterdam was currently the most stable and well-supplied bunkering point compared to the hubs east of the Suez Canal. “It is shielded from the immediate Middle East disruptions, and as a result, Singapore is trading at a massive $140 to $250 per ton premium over Rotterdam prices,” he told the Journal of Commerce. Peter Sand, chief analyst at rate benchmarking platform Xeneta, said bunker fuel in Singapore was available at prices almost double pre-conflict levels, but the prices were trending slowly downwards after the initial spike of 200%. “With no visible end to the crisis, however, carriers are almost certainly drawing up another set of contingency plans,” Sand said in a market update Thursday. “The coming weeks will show whether slow steaming and alternative routing can hold the line, or whether blank sailings become the next lever carriers reach for.” <h3>Emergency surcharge prices rise </h3>One of the contingency plans being aggressively pursued by carriers are emergency bunker fuel surcharges piled on top of existing quarterly fuel cost recovery mechanisms. For instance, Maersk from March 25 has been charging $400 per FEU on long-haul head-haul routes and $600/FEU for reefers, while CMA CGM since March 27 has been charging emergency fuel surcharges of $265/TEU, and $320/TEU for reefers. Ocean Network Express set long-haul head-haul surcharges at $160/TEU, with $210/TEU for reefers, while Mediterranean Shipping Co. has implemented a range of fuel surcharges covering specific regional routes. Maersk this week again asked US maritime regulators to <a href="https://www.joc.com/article/maersk-again-asks-fmc-to-waive-30-day-review-period-for-emergency-fuel-surcharge-6197792">waive the 30-day notice period</a> required before liners can implement surcharges so it could immediately roll out emergency fuel surcharges on long-haul US trades. The Federal Maritime Commission <a href="https://www.joc.com/article/fmc-rejects-requests-by-carriers-to-waive-waiting-period-for-middle-east-surcharges-6191881">previously rejected an initial attempt by Maersk and three other carriers to waive the notice period</a> and is expected to rule on the second request soon. Rolf Habben Jansen, CEO of Hapag-Lloyd, last week put a price on the Middle East war, telling reporters that the carrier <a href="https://www.joc.com/article/war-adding-40-50-million-per-week-to-hapag-lloyds-costs-ceo-6193532">was shouldering added operating costs of $40 million to $50 million a week</a>. Most of that was driven by higher bunker fuel prices and rising insurance premiums in the Middle East. “Our intention is not to make a profit (from surcharges),” Habben Jansen told reporters during a media briefing. “We are trying to limit the charges to the extra costs we need to recover. We are trying to ring-fence the problem as much as possible.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Suppliers in the world’s largest bunkering hub of Singapore are under growing stress, with analysts reporting less than a month’s supply remaining and no replenishment in sight from one of its most important fuel supply lines. More than 50% of the city-state's bunker fuel is believed to be imported via the Strait of Hormuz, which has been effectively closed since the war in the Middle East started on Feb. 28. Although Singapore remains able to refuel ships, the clock is ticking on the available supply, according to Fotios Katsoulas, director and head of tankers, freight and alternative fuels research at S&P Global Energy. "If the current supply-demand imbalance persists, we expect a rapid acceleration in stock drawdowns as existing inventories — currently sufficient for about three weeks of typical demand — begin to deplete,” he said. S&P Global is the parent company of the Journal of Commerce. Katsoulas said the Singapore market was under “significant stress,” with recommended lead times for ocean carriers replenishing very low sulfur fuel oil (VLSFO) currently stretching to more than a week in some cases. “Prompt availability is extremely tight,” he said. “We are seeing reports of suppliers already prioritizing existing term contracts and resisting new tenders for the next (few) months.” The immense scale of Singapore’s bunkering industry underlines the problem facing fuel suppliers in the port should the Strait of Hormuz remain closed. Singapore sold 56.2 million metric tons (mt) of bunker fuel in 2025, up 3.2% year over year, according to data from the Maritime and Port Authority of Singapore. That was more than five times the bunker sales at the world’s second-largest ship refueling hub of Rotterdam, with sales driven by strong high sulfur fuel oil (HSFO) demand as VLSFO sales dropped off. Traders in Singapore have been sourcing oil from areas outside the Middle East, such as Brazil and Russia, according to reports. The US in March issued a 30-day waiver allowing the purchase of previously sanctioned Russian oil and gas, and Singapore is taking advantage of that by increasing imports to support bunker availability. Fuel prices drop off mid-March highs The scarcity of supply since Feb. 28 has pushed up bunker fuel prices in Singapore, but prices have declined since the mid-March highs. On April 1, VLSFO in Singapore was selling at $873.50 per metric ton, up 70% since Feb. 27 but far below its March 16 high of $1,119/mt, according to the Ship & Bunker platform. HSFO has followed a similar path, up 60% from Feb. 27 at $695/mt, but down 35% from the March 9 price of $1,073/mt. Bucking the trend is low sulfur marine gas oil (MGO), used by carriers in emission control areas such as the coasts of North America, the Caribbean, the Baltic and North seas, and the Mediterranean. MGO prices in Singapore on April 1 were at $1,836/mt, not far off the March 23 high of $1,940, but 160% above the pre-war price, Ship & Bunker data showed. In Rotterdam, VLSFO was trading at $716.50/mt on April 1, up almost 50% from Feb. 27. HSFO was at $661.50, up 50% since before the war, while MGO was 85% higher at $1,331/mt, Ship & Bunker’s latest pricing showed. Katsoulas said Rotterdam was currently the most stable and well-supplied bunkering point compared to the hubs east of the Suez Canal. “It is shielded from the immediate Middle East disruptions, and as a result, Singapore is trading at a massive $140 to $250 per ton premium over Rotterdam prices,” he told the Journal of Commerce. Peter Sand, chief analyst at rate benchmarking platform Xeneta, said bunker fuel in Singapore was available at prices almost double pre-conflict levels, but the prices were trending slowly downwards after the initial spike of 200%. “With no visible end to the crisis, however, carriers are almost certainly drawing up another set of contingency plans,” Sand said in a market update Thursday. “The coming weeks will show whether slow steaming and alternative routing can hold the line, or whether blank sailings become the next lever carriers reach for.” Emergency surcharge prices rise One of the contingency plans being aggressively pursued by carriers are emergency bunker fuel surcharges piled on top of existing quarterly fuel cost recovery mechanisms. For instance, Maersk from March 25 has been charging $400 per FEU on long-haul head-haul routes and $600/FEU for reefers, while CMA CGM since March 27 has been charging emergency fuel surcharges of $265/TEU, and $320/TEU for reefers. Ocean Network Express set long-haul head-haul surcharges at $160/TEU, with $210/TEU for reefers, while Mediterranean Shipping Co. has implemented a range of fuel surcharges covering specific regional routes. Maersk this week again asked US maritime regulators to waive the 30-day notice period required before liners can implement surcharges so it could immediately roll out emergency fuel surcharges on long-haul US trades. The Federal Maritime Commission previously rejected an initial attempt by Maersk and three other carriers to waive the notice period and is expected to rule on the second request soon. Rolf Habben Jansen, CEO of Hapag-Lloyd, last week put a price on the Middle East war, telling reporters that the carrier was shouldering added operating costs of $40 million to $50 million a week . Most of that was driven by higher bunker fuel prices and rising insurance premiums in the Middle East. “Our intention is not to make a profit (from surcharges),” Habben Jansen told reporters during a media briefing. “We are trying to limit the charges to the extra costs we need to recover. We are trying to ring-fence the problem as much as possible.” Contact Greg Knowler at greg.knowler@spglobal.com .

Container lines

Singapore bunker supply continues to run down as Middle East war drags on

<div class="phx-topic abstract-wrapper">The carrier is implementing a second surcharge on US trades to recoup higher operating costs driven by the war in the Middle East, and is asking maritime regulators for permission to levy the fee immediately.</div>

The carrier is implementing a second surcharge on US trades to recoup higher operating costs driven by the war in the Middle East, and is asking maritime regulators for permission to levy the fee immediately.

<div class="phx-topic">Maersk is making another attempt to win approval from US maritime regulators to waive a 30-day notice period and permit the carrier to immediately implement an emergency bunker fuel surcharge on long-haul US trades to offset rising costs driven by the war in the Middle East. The Federal Maritime Commission (FMC) is expected to vote soon on Maersk’s new request, a spokesperson for the agency said. That comes as the agency on Wednesday rejected requests from two forwarders for a waiver of the 30-day notice period that is required before liners can implement surcharges. The FMC <a href="https://www.joc.com/article/fmc-rejects-requests-by-carriers-to-waive-waiting-period-for-middle-east-surcharges-6191881">previously rejected an initial attempt by Maersk and three other carriers</a> to waive the notice period. How the FMC votes on Maersk’s latest request for special permission to implement surcharges in the hundreds of dollars per container could prove a test case for other carriers seeking to recoup war-driven energy costs from US shippers and forwarders. The FMC’s four commissioners on March 23 unanimously voted to reject separate requests from Maersk, CMA CGM, Hapag-Lloyd and Zim Integrated Shipping Services to waive the notice period, forcing the carriers to wait until this week to implement the initial surcharges. FMC Chairman Laura DiBella said the carriers should have provided data behind the decision to levy the surcharge and specify a duration, so the fee is “reasonably related to the increased costs.” In its initial March 11 filing to the FMC, Maersk asked the agency to waive the notice period for the new emergency bunker fuel surcharge so it could take effect March 25, coinciding with the implementation of similar surcharges on non-US trades, rather than April 8. In its latest petition, the carrier said low-sulfur bunker fuel prices jumped 82% on average, to $929 per metric ton, between Feb. 6 and March 9. The war began Feb. 28. “Maersk cannot absorb the full impact of this dramatic increase,” Wayne Rohde, an attorney at Cozen O’Conner representing Maersk, wrote in the filing to the FMC. “Moreover, bunker fuel prices are likely to remain elevated and volatile given the uncertainty of the duration of hostilities and their impact on the price of oil and bunker fuel.” For dry shipments on long-haul trades, Maersk is seeking an emergency fuel surcharge of $200 per TEU for the head-haul and $100 per TEU for the backhaul. Comparatively, Maersk has implemented a $300-per-TEU surcharge for refrigerated shipments on the head-haul of long-haul shipments and $150 for reefer backhaul cargoes. <h3>Holding the line </h3>The FMC on Wednesday rejected two separate requests to waive the 30-day review period for emergency surcharges. The agency denied a request by Turkon Container Transportation and Shipping to immediately impose a fee on all shipments to and from the Middle East of $2,000 per TEU, $3,000 per FEU, and $3,500 for refrigerated and special containers. The agency also denied a request by Vanguard Logistics Services, a non-vessel-operating common carrier, to immediately implement a $75 surcharge on shipments to and from the Middle East. In both cases, the FMC said the parties had failed to establish good cause to have the review period waived.The latest round of requests shows that “carriers are making the same fatal error that led to the prior denials — failing to provide their customers and the FMC specific cost information so they can determine their need for immediate imposition of very specific surcharges,” Peter Friedmann, executive director of the Agriculture Transportation Coalition, said in a statement. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Maersk is making another attempt to win approval from US maritime regulators to waive a 30-day notice period and permit the carrier to immediately implement an emergency bunker fuel surcharge on long-haul US trades to offset rising costs driven by the war in the Middle East. The Federal Maritime Commission (FMC) is expected to vote soon on Maersk’s new request, a spokesperson for the agency said. That comes as the agency on Wednesday rejected requests from two forwarders for a waiver of the 30-day notice period that is required before liners can implement surcharges. The FMC previously rejected an initial attempt by Maersk and three other carriers to waive the notice period. How the FMC votes on Maersk’s latest request for special permission to implement surcharges in the hundreds of dollars per container could prove a test case for other carriers seeking to recoup war-driven energy costs from US shippers and forwarders. The FMC’s four commissioners on March 23 unanimously voted to reject separate requests from Maersk, CMA CGM, Hapag-Lloyd and Zim Integrated Shipping Services to waive the notice period, forcing the carriers to wait until this week to implement the initial surcharges. FMC Chairman Laura DiBella said the carriers should have provided data behind the decision to levy the surcharge and specify a duration, so the fee is “reasonably related to the increased costs.” In its initial March 11 filing to the FMC, Maersk asked the agency to waive the notice period for the new emergency bunker fuel surcharge so it could take effect March 25, coinciding with the implementation of similar surcharges on non-US trades, rather than April 8. In its latest petition, the carrier said low-sulfur bunker fuel prices jumped 82% on average, to $929 per metric ton, between Feb. 6 and March 9. The war began Feb. 28. “Maersk cannot absorb the full impact of this dramatic increase,” Wayne Rohde, an attorney at Cozen O’Conner representing Maersk, wrote in the filing to the FMC. “Moreover, bunker fuel prices are likely to remain elevated and volatile given the uncertainty of the duration of hostilities and their impact on the price of oil and bunker fuel.” For dry shipments on long-haul trades, Maersk is seeking an emergency fuel surcharge of $200 per TEU for the head-haul and $100 per TEU for the backhaul. Comparatively, Maersk has implemented a $300-per-TEU surcharge for refrigerated shipments on the head-haul of long-haul shipments and $150 for reefer backhaul cargoes. Holding the line The FMC on Wednesday rejected two separate requests to waive the 30-day review period for emergency surcharges. The agency denied a request by Turkon Container Transportation and Shipping to immediately impose a fee on all shipments to and from the Middle East of $2,000 per TEU, $3,000 per FEU, and $3,500 for refrigerated and special containers. The agency also denied a request by Vanguard Logistics Services, a non-vessel-operating common carrier, to immediately implement a $75 surcharge on shipments to and from the Middle East. In both cases, the FMC said the parties had failed to establish good cause to have the review period waived. The latest round of requests shows that “carriers are making the same fatal error that led to the prior denials — failing to provide their customers and the FMC specific cost information so they can determine their need for immediate imposition of very specific surcharges,” Peter Friedmann, executive director of the Agriculture Transportation Coalition, said in a statement. Contact Mark Szakonyi at  mark.szakonyi@spglobal.com .

Transport, Trade and Regulation News

Maersk again asks FMC to waive 30-day review period for emergency fuel surcharge

<div class="phx-topic abstract-wrapper">The first vessel on the carrier’s Caribbean-North America service will call the port next week, offering Canadian exporters more transshipment options to other markets. </div>

The first vessel on the carrier’s Caribbean-North America service will call the port next week, offering Canadian exporters more transshipment options to other markets.

<div class="phx-topic">CMA CGM has added the Port of Montreal to its main north-south liner service for the North American East Coast, the carrier said Wednesday, with the new service also offering a transshipment option for Canadian exporters looking to reach global markets. The CMA CGM Homere is expected to make its first call to the Cast Terminal at Montreal on April 5, according to the carrier’s schedule. The 1,713-TEU ship is part of CMA CGM’s Cagema service with a northbound rotation including Jamaica, the Dominican Republic, Puerto Rico, New York-New Jersey, Montreal and Port Saint John. CMA CGM said in a statement that Montreal shippers will also be able to access the Indian subcontinent, Mediterranean, Middle East and Oceania ports through the backhaul connection to CMA CGM’s New Jersey terminal. In addition, Asian services can be accessed through transshipment at Jamaica’s Kingston port. The Montreal Port Authority (MPA) said in a statement the addition of the Cagema service will open new markets for Canada’s exports. It added that the new service will also offer a new direct connection for refrigerated produce imports into Montreal, so shippers can bypass imports through other US East Coast ports. “The addition of the Cagema service will help increase the port’s competitiveness, diversify the markets served and open up new export opportunities for Canadian companies,” the MPA said. While a small part of its business, the MPA said north-south trades have been one of its faster-growing segments. Trade with Latin America accounted for about 5% of the port’s total container tonnage last year, or approximately 70,000 TEUs, up 12% from 2024, according to data from the port. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

CMA CGM has added the Port of Montreal to its main north-south liner service for the North American East Coast, the carrier said Wednesday, with the new service also offering a transshipment option for Canadian exporters looking to reach global markets. The CMA CGM Homere is expected to make its first call to the Cast Terminal at Montreal on April 5, according to the carrier’s schedule. The 1,713-TEU ship is part of CMA CGM’s Cagema service with a northbound rotation including Jamaica, the Dominican Republic, Puerto Rico, New York-New Jersey, Montreal and Port Saint John. CMA CGM said in a statement that Montreal shippers will also be able to access the Indian subcontinent, Mediterranean, Middle East and Oceania ports through the backhaul connection to CMA CGM’s New Jersey terminal. In addition, Asian services can be accessed through transshipment at Jamaica’s Kingston port. The Montreal Port Authority (MPA) said in a statement the addition of the Cagema service will open new markets for Canada’s exports. It added that the new service will also offer a new direct connection for refrigerated produce imports into Montreal, so shippers can bypass imports through other US East Coast ports. “The addition of the Cagema service will help increase the port’s competitiveness, diversify the markets served and open up new export opportunities for Canadian companies,” the MPA said. While a small part of its business, the MPA said north-south trades have been one of its faster-growing segments. Trade with Latin America accounted for about 5% of the port’s total container tonnage last year, or approximately 70,000 TEUs, up 12% from 2024, according to data from the port. Contact Michael Angell at michael.angell@spglobal.com .

Montreal shippers get new north-south service from CMA CGM 

<div class="phx-topic abstract-wrapper">The decision to push back the late-April implementation is in response to industry appeals and the Middle East crisis, which has left Indian ports handling significant rerouted volumes of stranded Persian Gulf-bound containers. </div>

The decision to push back the late-April implementation is in response to industry appeals and the Middle East crisis, which has left Indian ports handling significant rerouted volumes of stranded Persian Gulf-bound containers.

<div class="phx-topic">India will delay by six months the enforcement of a rebooted cabotage policy that sought to revoke the coastal shipping freedom <a href="https://www.joc.com/article/india-scraps-cabotage-rule-opens-domestic-freight-to-foreign-ocean-carriers-5229628">extended to foreign-flag vessel operators in 2018</a>. The incumbent regulatory support has long enabled carriers to freely move laden containers for transshipment and empty boxes for repositioning intra-country. The Ministry of Ports &amp; Shipping, in announcing the reprieve Tuesday, said the decision to push back the late-April implementation is in response to industry appeals and the Middle East crisis, which has left Indian ports handling significant rerouted volumes of stranded Persian Gulf-bound containers. “...Representations have been received from stakeholders, including container liner operators’ associations, highlighting operational concerns arising out of the prevailing geopolitical situation, particularly in the Persian Gulf region, affecting global shipping dynamics such as route planning, insurance costs and vessel deployment,” the ministry said. While the Middle East chaos is an “incidental operational challenge,” it is believed that carrier representatives had already been engaging with policymakers — individually and through industry bodies — to seek a review of the policy U-turn or at least gain more time to get ready for the new operational environment. Local industry analysts view the temporary reprieve more as regulatory posturing as liner heavyweights come forward to diversify their investment interests in India, including reflagging vessels to the local registry. Maersk, CMA CGM, Mediterranean Shipping Co. <a href="https://www.joc.com/article/hapag-lloyd-to-invest-1-billion-across-indian-maritime-verticals-6189463">and Hapag-Lloyd</a> have either already added a few ships to the Indian flag or confirmed flag changing plans. “India is emerging as a transshipment hub, and global operators and shipping lines have shown commitment towards flagging container ships in India,” the ministry said in its statement. Sunil Vaswani, executive director of the Container Shipping Lines’ Association (India), welcomed the government’s decision. “The extension of cabotage relaxations was much needed under the current circumstances wherein transshipment at Indian ports has further increased,” Vaswani told the Journal of Commerce. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

India will delay by six months the enforcement of a rebooted cabotage policy that sought to revoke the coastal shipping freedom extended to foreign-flag vessel operators in 2018 . The incumbent regulatory support has long enabled carriers to freely move laden containers for transshipment and empty boxes for repositioning intra-country. The Ministry of Ports & Shipping, in announcing the reprieve Tuesday, said the decision to push back the late-April implementation is in response to industry appeals and the Middle East crisis, which has left Indian ports handling significant rerouted volumes of stranded Persian Gulf-bound containers. “...Representations have been received from stakeholders, including container liner operators’ associations, highlighting operational concerns arising out of the prevailing geopolitical situation, particularly in the Persian Gulf region, affecting global shipping dynamics such as route planning, insurance costs and vessel deployment,” the ministry said. While the Middle East chaos is an “incidental operational challenge,” it is believed that carrier representatives had already been engaging with policymakers — individually and through industry bodies — to seek a review of the policy U-turn or at least gain more time to get ready for the new operational environment. Local industry analysts view the temporary reprieve more as regulatory posturing as liner heavyweights come forward to diversify their investment interests in India, including reflagging vessels to the local registry. Maersk, CMA CGM, Mediterranean Shipping Co. and Hapag-Lloyd have either already added a few ships to the Indian flag or confirmed flag changing plans. “India is emerging as a transshipment hub, and global operators and shipping lines have shown commitment towards flagging container ships in India,” the ministry said in its statement. Sunil Vaswani, executive director of the Container Shipping Lines’ Association (India), welcomed the government’s decision. “The extension of cabotage relaxations was much needed under the current circumstances wherein transshipment at Indian ports has further increased,” Vaswani told the Journal of Commerce. Contact Bency Mathew at bencyvmathew@gmail.com .

International ports

India delays cabotage rewind plan amid carrier pressure, Middle East reroutings

<div class="phx-topic abstract-wrapper">Southern California’s traditional solutions to surging freight volumes ignore the fact that they might well have reached the limits of being effective, writes Ted Prince.</div>

Southern California’s traditional solutions to surging freight volumes ignore the fact that they might well have reached the limits of being effective, writes Ted Prince.

<div class="phx-topic">The Journal of Commerce’s TPM conference has completed another big show in Long Beach. And while most attendees were living with the lingering impacts of the Trump administration’s tariff policy, we were all faced with the added geopolitical suspense brought about by the US and Israeli strikes on Iran that commenced as TPM attendees arrived. While this drama played out, I thought back to Michelle Phillips of the Mamas and the Papas eating a banana during a 1967 performance of “California Dreamin’” on the Ed Sullivan Show. This was to protest the band being forced to lip-sync rather than perform live. Just as the protest distracted from the singing, war and tariffs effectively blocked out any consideration of how California is planning to handle current volumes, let alone a doubling by 2050. Traditionally, this has meant bemoaning California’s “socialist state” — albeit with the fourth- or fifth-largest economy in the world. There is no shortage of issues. California Air Resources Board (CARB) rules on advanced clean trucks and advanced clean fleets impact freight transportation by mandating a transition to zero-emission trucks over time. These are on top of previous diesel tractor emission and “clean” diesel truck regulations. CARB has also adopted policies to reduce emissions from marine terminals and at-berth ship emissions. In addition, the harbor drayage community continues to deal with the AB5 legislation dealing with worker classification. Much like tariffs, all of these are subject to conflicting interpretations with the federal government. And, on a global level, confusion reigns over the International Maritime Organization’s net-zero framework. But the list of greatest hits being lip-synched is much larger. Let’s roll the tape. <h3>Will projects become reality? </h3>The Port of Long Beach continues to talk up its Pier B Rail expansion. But this project doesn’t solve the problem of destination disaggregation. Assembling less-than-fully-loaded stack cars to a plethora of destinations actually cannibalizes double-stack linehaul economics. (This network scope vs. scale issue is also pertinent in the current transcontinental railroad debate.) The Port of Los Angeles has its own multi-billion-dollar long shot — Pier 500. Given its configuration, the most realistic method to handle bigger, next-generation cargo ships is to make it an adjunct to APM Terminals’ Pier 400 — and obviate the need to replicate gates, buildings and on-dock rail. Otherwise, there simply isn’t enough land short of container levitation. The Barstow International Gateway (BIG) is BNSF’s planned inland intermodal and logistics complex. It is still in the environmental review and permitting stage. I am sure that BNSF hopes it progresses better than its current Phoenix project, which is even more ambitious than BIG. BNSF’s need for BIG is no doubt driven by previous Southern California failures: passing on the Intermodal Container Transfer Facility (ICTF) and failing to garner approval for the Southern California Intermodal Gateway (SCIG). Part of BIG’s value proposition is that distribution centers will locate there because traffic will be processed using zero- and near-zero-emission cargo-handling equipment. However, getting new or upgraded electric service in the Inland Empire has proven problematic, so a clear trajectory of electrified warehouse space cannot be assumed. Further north, the Wonderful Logistics Center has a SeaCube Cold Solutions container depot already supporting local refrigerated exporters; however, the planned international rail shuttle linking Shafter to the Port of Los Angeles using BNSF is still under development. Whereas BIG is a many-to-one network, this is more complicated because traffic is not transitive and it is one-to-many. (Pesky car utilization issues again.) Also, refrigerated produce is a much more complicated rail transportation product than dry imports. Meanwhile, the Mojave Inland Port remains a proposed, private development that has not progressed beyond county-level approvals in 2022. Perhaps the issue is that there does not appear to be a sustainable desire to build distribution centers in the middle of a desert. For decades, Southern California has held itself out to be the answer to the impending freight tsunami, yet a focus on more-of-the-same traditional solutions ignores the fact that these might well have reached their limits. Otherwise, the greatest hits lip-synching will continue, and we may be reminded that “banana” can come to stand for “Build Absolutely Nothing Anywhere Near Anything.” In that case, the global supply chain will need to sing a new song. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>.</div>

The Journal of Commerce’s TPM conference has completed another big show in Long Beach. And while most attendees were living with the lingering impacts of the Trump administration’s tariff policy, we were all faced with the added geopolitical suspense brought about by the US and Israeli strikes on Iran that commenced as TPM attendees arrived. While this drama played out, I thought back to Michelle Phillips of the Mamas and the Papas eating a banana during a 1967 performance of “California Dreamin’” on the Ed Sullivan Show. This was to protest the band being forced to lip-sync rather than perform live. Just as the protest distracted from the singing, war and tariffs effectively blocked out any consideration of how California is planning to handle current volumes, let alone a doubling by 2050. Traditionally, this has meant bemoaning California’s “socialist state” — albeit with the fourth- or fifth-largest economy in the world. There is no shortage of issues. California Air Resources Board (CARB) rules on advanced clean trucks and advanced clean fleets impact freight transportation by mandating a transition to zero-emission trucks over time. These are on top of previous diesel tractor emission and “clean” diesel truck regulations. CARB has also adopted policies to reduce emissions from marine terminals and at-berth ship emissions. In addition, the harbor drayage community continues to deal with the AB5 legislation dealing with worker classification. Much like tariffs, all of these are subject to conflicting interpretations with the federal government. And, on a global level, confusion reigns over the International Maritime Organization’s net-zero framework. But the list of greatest hits being lip-synched is much larger. Let’s roll the tape. Will projects become reality? The Port of Long Beach continues to talk up its Pier B Rail expansion. But this project doesn’t solve the problem of destination disaggregation. Assembling less-than-fully-loaded stack cars to a plethora of destinations actually cannibalizes double-stack linehaul economics. (This network scope vs. scale issue is also pertinent in the current transcontinental railroad debate.) The Port of Los Angeles has its own multi-billion-dollar long shot — Pier 500. Given its configuration, the most realistic method to handle bigger, next-generation cargo ships is to make it an adjunct to APM Terminals’ Pier 400 — and obviate the need to replicate gates, buildings and on-dock rail. Otherwise, there simply isn’t enough land short of container levitation. The Barstow International Gateway (BIG) is BNSF’s planned inland intermodal and logistics complex. It is still in the environmental review and permitting stage. I am sure that BNSF hopes it progresses better than its current Phoenix project, which is even more ambitious than BIG. BNSF’s need for BIG is no doubt driven by previous Southern California failures: passing on the Intermodal Container Transfer Facility (ICTF) and failing to garner approval for the Southern California Intermodal Gateway (SCIG). Part of BIG’s value proposition is that distribution centers will locate there because traffic will be processed using zero- and near-zero-emission cargo-handling equipment. However, getting new or upgraded electric service in the Inland Empire has proven problematic, so a clear trajectory of electrified warehouse space cannot be assumed. Further north, the Wonderful Logistics Center has a SeaCube Cold Solutions container depot already supporting local refrigerated exporters; however, the planned international rail shuttle linking Shafter to the Port of Los Angeles using BNSF is still under development. Whereas BIG is a many-to-one network, this is more complicated because traffic is not transitive and it is one-to-many. (Pesky car utilization issues again.) Also, refrigerated produce is a much more complicated rail transportation product than dry imports. Meanwhile, the Mojave Inland Port remains a proposed, private development that has not progressed beyond county-level approvals in 2022. Perhaps the issue is that there does not appear to be a sustainable desire to build distribution centers in the middle of a desert. For decades, Southern California has held itself out to be the answer to the impending freight tsunami, yet a focus on more-of-the-same traditional solutions ignores the fact that these might well have reached their limits. Otherwise, the greatest hits lip-synching will continue, and we may be reminded that “banana” can come to stand for “Build Absolutely Nothing Anywhere Near Anything.” In that case, the global supply chain will need to sing a new song. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at ted@tricitiesintermodal.com .

Supply chain

Are SoCal’s planned freight projects a matter of ‘California Dreamin’’?

<div class="phx-topic abstract-wrapper">Record fleet expansion, widening scale disparities, and lingering financial reserves have combined to create a rare window in which transformative deals among ocean carriers are both feasible and strategically rational.</div>

Record fleet expansion, widening scale disparities, and lingering financial reserves have combined to create a rare window in which transformative deals among ocean carriers are both feasible and strategically rational.

<div class="phx-topic">Debate over consolidation in the container shipping industry has persisted for decades. Advocates argue that the sector has long been fragmented, and that further consolidation is essential to improve financial resilience, operational efficiency, and long-term sustainability. Critics counter that consolidation concentrates pricing power in the hands of a few large players, potentially leading to higher freight rates and reduced competition. In my personal experience, the industry’s structural cyclicality has changed little over time. Freight rate movements in recent months suggest that competitive pressure remains intense, both within alliances and between independent carriers. Indeed, competition is likely to increase over the next three to five years as new vessel capacity enters the market. However, the competitive landscape itself has shifted dramatically. The global container ship order book currently stands at more than 35% of the existing fleet — an unprecedented level. At the same time, the four largest carriers — Mediterranean Shipping Co., CMA CGM, Maersk and Cosco — have taken decisive steps to widen the gap between themselves and the rest of the industry. Meanwhile, Hapag-Lloyd has strengthened its position as a clear number five, extending its lead over mid-tier competitors such as Ocean Network Express, Evergreen, HMM and PIL. (Industry data sources include Drewry and Clarksons Research.) Shipping is a low-margin, capital-intensive business where scale matters enormously. Larger fleets enable lower unit costs, stronger purchasing power, and more efficient network deployment, yet there are limits to what alliances alone can deliver. Alliances primarily provide network coordination and slot sharing; they do not generate the full cost synergies available through unified ownership structures. True economies of scale typically come from either expanding fleets organically or pursuing mergers and acquisitions. Of the two, M&amp;A offers the additional advantage of organizational synergies — streamlined management, consolidated procurement, integrated IT platforms, and rationalized overhead — that alliances cannot replicate. This raises an important question: Why is consolidation particularly relevant now? In cyclical industries such as container shipping, mergers rarely occur at market peaks. When profits are strong, shareholder expectations rise, valuations expand and forward multiples make transactions difficult to justify. Conversely, consolidation tends to occur during downturns or when markets are transitioning toward weaker conditions. That transition phase appears to be underway today. <h3>COVID-era profits provide ‘window of opportunity’ for carriers </h3>Many carriers still retain significant liquidity accumulated during the extraordinary profitability of the COVID-19 era boom. These financial reserves provide a unique window of opportunity. Companies can invest in strategic partnerships or acquisitions while still maintaining operational stability and customer confidence. They also have the resources needed to execute careful integrations that are critical to preserving service quality and avoiding customer disruption. If carriers wait several years, those reserves may be eroded by weaker freight markets, rising costs, or capital expenditures tied to fleet renewal and decarbonization requirements. The mid-tier segment of the industry presents multiple potential merger candidates. Historically, national interests have complicated cross-border consolidation, as governments often view shipping lines as strategic assets tied to trade security and economic policy. Yet recent developments suggest that such barriers are not insurmountable. Hapag-Lloyd’s proposed acquisition of Zim demonstrates that creative structures can address national security concerns while still enabling industrial consolidation. The ability to design tailored governance or ownership arrangements may unlock additional transactions that once seemed politically impossible. Customers, too, have a stake in consolidation, perhaps more than is commonly recognized. Over time, a more consolidated industry can produce greater stability. Previous downturns, including those in 2001, 2009 and 2016, revealed how financially distressed carriers can disrupt supply chains. When shipping lines suffer sustained losses, they often resort to abrupt service cancellations, capacity withdrawals, and large-scale blank sailings. These measures create uncertainty for shippers, ports, logistics providers, and equipment lessors. Most of us vividly remember the collapse of Hanjin Shipping. Its bankruptcy triggered widespread cargo disruptions, stranded containers, port congestion and financial losses across the logistics ecosystem. Such systemic shocks underscore the broader economic value of financially stronger carriers. Consolidation, if executed in a timely manner, can reduce the likelihood of extreme distress events by improving cost structures and balance sheet resilience. <h3>‘Pivotal moment’ </h3>To reassure the skeptics, we can rest assured that competition authorities will continue to monitor market concentration carefully, and customers will demand tangible service improvements rather than promises of efficiency. Nevertheless, the strategic logic is compelling. The container shipping industry stands at a pivotal moment. Record fleet expansion, widening scale disparities, and lingering financial reserves combine to create a rare window in which transformative deals are both feasible and strategically rational. Delaying action could mean missing that window, as market conditions tighten and financial flexibility declines. For carriers, investors and customers alike, timely consolidation offers the prospect of a more stable and sustainable industry. In a sector long defined by volatility, that outcome should be in everyone’s interest. Robbert van Trooijen, founder and president of Inception Partners and a McKinsey consultant, had a 33-year tenure with The Nedlloyd Group, P&amp;O Nedlloyd and the Maersk Group. Contact him at <a href="mailto:robbert@inceptionpartners.org">robbert@inceptionpartners.org</a>. </div>

Debate over consolidation in the container shipping industry has persisted for decades. Advocates argue that the sector has long been fragmented, and that further consolidation is essential to improve financial resilience, operational efficiency, and long-term sustainability. Critics counter that consolidation concentrates pricing power in the hands of a few large players, potentially leading to higher freight rates and reduced competition. In my personal experience, the industry’s structural cyclicality has changed little over time. Freight rate movements in recent months suggest that competitive pressure remains intense, both within alliances and between independent carriers. Indeed, competition is likely to increase over the next three to five years as new vessel capacity enters the market. However, the competitive landscape itself has shifted dramatically. The global container ship order book currently stands at more than 35% of the existing fleet — an unprecedented level. At the same time, the four largest carriers — Mediterranean Shipping Co., CMA CGM, Maersk and Cosco — have taken decisive steps to widen the gap between themselves and the rest of the industry. Meanwhile, Hapag-Lloyd has strengthened its position as a clear number five, extending its lead over mid-tier competitors such as Ocean Network Express, Evergreen, HMM and PIL. (Industry data sources include Drewry and Clarksons Research.) Shipping is a low-margin, capital-intensive business where scale matters enormously. Larger fleets enable lower unit costs, stronger purchasing power, and more efficient network deployment, yet there are limits to what alliances alone can deliver. Alliances primarily provide network coordination and slot sharing; they do not generate the full cost synergies available through unified ownership structures. True economies of scale typically come from either expanding fleets organically or pursuing mergers and acquisitions. Of the two, M&A offers the additional advantage of organizational synergies — streamlined management, consolidated procurement, integrated IT platforms, and rationalized overhead — that alliances cannot replicate. This raises an important question: Why is consolidation particularly relevant now? In cyclical industries such as container shipping, mergers rarely occur at market peaks. When profits are strong, shareholder expectations rise, valuations expand and forward multiples make transactions difficult to justify. Conversely, consolidation tends to occur during downturns or when markets are transitioning toward weaker conditions. That transition phase appears to be underway today. COVID-era profits provide ‘window of opportunity’ for carriers Many carriers still retain significant liquidity accumulated during the extraordinary profitability of the COVID-19 era boom. These financial reserves provide a unique window of opportunity. Companies can invest in strategic partnerships or acquisitions while still maintaining operational stability and customer confidence. They also have the resources needed to execute careful integrations that are critical to preserving service quality and avoiding customer disruption. If carriers wait several years, those reserves may be eroded by weaker freight markets, rising costs, or capital expenditures tied to fleet renewal and decarbonization requirements. The mid-tier segment of the industry presents multiple potential merger candidates. Historically, national interests have complicated cross-border consolidation, as governments often view shipping lines as strategic assets tied to trade security and economic policy. Yet recent developments suggest that such barriers are not insurmountable. Hapag-Lloyd’s proposed acquisition of Zim demonstrates that creative structures can address national security concerns while still enabling industrial consolidation. The ability to design tailored governance or ownership arrangements may unlock additional transactions that once seemed politically impossible. Customers, too, have a stake in consolidation, perhaps more than is commonly recognized. Over time, a more consolidated industry can produce greater stability. Previous downturns, including those in 2001, 2009 and 2016, revealed how financially distressed carriers can disrupt supply chains. When shipping lines suffer sustained losses, they often resort to abrupt service cancellations, capacity withdrawals, and large-scale blank sailings. These measures create uncertainty for shippers, ports, logistics providers, and equipment lessors. Most of us vividly remember the collapse of Hanjin Shipping. Its bankruptcy triggered widespread cargo disruptions, stranded containers, port congestion and financial losses across the logistics ecosystem. Such systemic shocks underscore the broader economic value of financially stronger carriers. Consolidation, if executed in a timely manner, can reduce the likelihood of extreme distress events by improving cost structures and balance sheet resilience. ‘Pivotal moment’ To reassure the skeptics, we can rest assured that competition authorities will continue to monitor market concentration carefully, and customers will demand tangible service improvements rather than promises of efficiency. Nevertheless, the strategic logic is compelling. The container shipping industry stands at a pivotal moment. Record fleet expansion, widening scale disparities, and lingering financial reserves combine to create a rare window in which transformative deals are both feasible and strategically rational. Delaying action could mean missing that window, as market conditions tighten and financial flexibility declines. For carriers, investors and customers alike, timely consolidation offers the prospect of a more stable and sustainable industry. In a sector long defined by volatility, that outcome should be in everyone’s interest. Robbert van Trooijen, founder and president of Inception Partners and a McKinsey consultant, had a 33-year tenure with The Nedlloyd Group, P&O Nedlloyd and the Maersk Group. Contact him at robbert@inceptionpartners.org .

In wake of Zim deal, the time for industry consolidation is now

Shanghai to Korea

{name} 
{dateX.formatDate('MMM dd, yyyy')}: ${valueY} 
Y-o-Y: {percet_year_Pusan.formatNumber("##.#%")}

The Shanghai Shipping Exchange’s (SSE) Shanghai Containerized Freight Index (SCFI) reflects spot rates and associated seaborne charges for containerized exports from Shanghai. The SCFI includes indices of freight rates in 13 individual shipping routes and a composite index, using Oct. 16, 2009, as the base period (Oct. 16, 2009 = 1,000). [SSE](https://en.sse.net.cn/indices/scfinew.jsp)

Shanghai to Korea container spot rates (SSE)

Shanghai to Korea Containe Spot Rates (SCFI-Weekly) Gateway

<div class="phx-topic abstract-wrapper">Rolf Habben Jansen told reporters that most of the new costs were coming from rising bunker fuel prices, with other areas such as insurance, container storage and inland transportation adding millions of dollars to weekly expenses. </div>

Rolf Habben Jansen told reporters that most of the new costs were coming from rising bunker fuel prices, with other areas such as insurance, container storage and inland transportation adding millions of dollars to weekly expenses.

<div class="phx-topic">The war in the Middle East has raised Hapag-Lloyd’s operating costs by $40 million to $50 million per week, a reality that “is not something that you can sustain for very long,” the carrier’s CEO said Thursday. Rolf Habben Jansen told reporters during a briefing that most of the new costs were coming from rising bunker fuel prices, with other areas such as insurance, container storage and inland transportation adding millions of dollars to weekly expenses. “To counterbalance that, we have introduced a number of contingency and emergency fuel surcharges,” he said. “This is not to collect more than the extra costs, but an extra cost of $40 million or $50 million per week is not something that you can sustain for very long.” While the disruption caused by the war has spilled over to ports outside the Persian Gulf, unlike the COVID-19 pandemic, the conflict is affecting only 3% of global container traffic, according to Hapag-Lloyd. But from a cost perspective, the impact is immense and growing. Emergency fuel surcharges <a href="https://www.joc.com/article/war-reignites-tussle-between-ocean-carriers-cargo-owners-over-fuel-surcharges-6188632">have been rolled out by several carriers</a> on top of quarterly bunker adjustment factors that were no match for fuel prices that have doubled since the conflict started on Feb. 28. Still, the practice drew swift condemnation from Global Shippers’ Council director James Hookham. “Sure, shipping lines need to watch their costs just like the rest of us but it’s not as if they don’t have working capital reserves of their own,” he told the Journal of Commerce. “The speed with which these charges are being imposed makes it nigh impossible for shippers to recover them from their own customers or suppliers.” On Monday, the US Federal Maritime Commission <a href="https://www.joc.com/article/fmc-rejects-requests-by-carriers-to-waive-waiting-period-for-middle-east-surcharges-6191881">unanimously rejected separate requests from four ocean carriers</a> to waive a 30-day notice period to implement surcharges tied to the war in the Middle East, forcing the four to wait until early April to charge their shipper customers. <h3>Ships trapped in the Gulf </h3>Hapag-Lloyd, meanwhile, has six fully crewed vessels that remain trapped in the Persian Gulf that the carrier is urgently trying to move out of harm’s way. There are unconfirmed reports that Iran is asking carriers to pay a “toll fee” of $1 million or $2 million per ship to guarantee safe passage through the Strait of Hormuz; Habben Jansen was asked whether Hapag-Lloyd would pay Tehran to secure its six ships. “We are pursuing every avenue that we can to try to get the ships and the crews safely out, and I would not rule out anything at this point,” he said. Habben Jansen declined to speculate on what a worst-case scenario around bunker fuel shortages would look like should Hormuz remain effectively closed, but he acknowledged that the longer the conflict continued, the greater the impact on the industry. “What we see is a lot of extra costs that we have to absorb for now, and in the short term that has a negative impact,” he said. “Longer term, it’s still difficult to judge, but we assume that we will be able to recover that extra cost and that’s why we are sticking with our annual forecast.” Hapag-Lloyd has left its 2026 profitability forecast unchanged, but left a wide gap between the high and low ends of the financial guidance. It expects group earnings before interest, taxes, depreciation and amortization to be between $1.1 billion and $3.1 billion, and earnings before interest and taxes to be between a $1.5 billion loss and a $500 million profit. The carrier has forecast that global volumes in 2026 will grow 3% year over year against market capacity growth of 4%. Hapag-Lloyd is trying to ringfence the Middle East conflict from an operational perspective to allow the rest of its network to run as normal, but it is being done in an environment of significant uncertainty, Habben Jansen acknowledged. “There are many things that could happen as a consequence of this conflict and it depends on how long it takes, because it could also have a negative effect on global demand or it could have a positive effect if it ends soon,” he said. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The war in the Middle East has raised Hapag-Lloyd’s operating costs by $40 million to $50 million per week, a reality that “is not something that you can sustain for very long,” the carrier’s CEO said Thursday. Rolf Habben Jansen told reporters during a briefing that most of the new costs were coming from rising bunker fuel prices, with other areas such as insurance, container storage and inland transportation adding millions of dollars to weekly expenses. “To counterbalance that, we have introduced a number of contingency and emergency fuel surcharges,” he said. “This is not to collect more than the extra costs, but an extra cost of $40 million or $50 million per week is not something that you can sustain for very long.” While the disruption caused by the war has spilled over to ports outside the Persian Gulf, unlike the COVID-19 pandemic, the conflict is affecting only 3% of global container traffic, according to Hapag-Lloyd. But from a cost perspective, the impact is immense and growing. Emergency fuel surcharges have been rolled out by several carriers on top of quarterly bunker adjustment factors that were no match for fuel prices that have doubled since the conflict started on Feb. 28. Still, the practice drew swift condemnation from Global Shippers’ Council director James Hookham. “Sure, shipping lines need to watch their costs just like the rest of us but it’s not as if they don’t have working capital reserves of their own,” he told the Journal of Commerce. “The speed with which these charges are being imposed makes it nigh impossible for shippers to recover them from their own customers or suppliers.” On Monday, the US Federal Maritime Commission unanimously rejected separate requests from four ocean carriers to waive a 30-day notice period to implement surcharges tied to the war in the Middle East, forcing the four to wait until early April to charge their shipper customers. Ships trapped in the Gulf Hapag-Lloyd, meanwhile, has six fully crewed vessels that remain trapped in the Persian Gulf that the carrier is urgently trying to move out of harm’s way. There are unconfirmed reports that Iran is asking carriers to pay a “toll fee” of $1 million or $2 million per ship to guarantee safe passage through the Strait of Hormuz; Habben Jansen was asked whether Hapag-Lloyd would pay Tehran to secure its six ships. “We are pursuing every avenue that we can to try to get the ships and the crews safely out, and I would not rule out anything at this point,” he said. Habben Jansen declined to speculate on what a worst-case scenario around bunker fuel shortages would look like should Hormuz remain effectively closed, but he acknowledged that the longer the conflict continued, the greater the impact on the industry. “What we see is a lot of extra costs that we have to absorb for now, and in the short term that has a negative impact,” he said. “Longer term, it’s still difficult to judge, but we assume that we will be able to recover that extra cost and that’s why we are sticking with our annual forecast.” Hapag-Lloyd has left its 2026 profitability forecast unchanged, but left a wide gap between the high and low ends of the financial guidance. It expects group earnings before interest, taxes, depreciation and amortization to be between $1.1 billion and $3.1 billion, and earnings before interest and taxes to be between a $1.5 billion loss and a $500 million profit. The carrier has forecast that global volumes in 2026 will grow 3% year over year against market capacity growth of 4%. Hapag-Lloyd is trying to ringfence the Middle East conflict from an operational perspective to allow the rest of its network to run as normal, but it is being done in an environment of significant uncertainty, Habben Jansen acknowledged. “There are many things that could happen as a consequence of this conflict and it depends on how long it takes, because it could also have a negative effect on global demand or it could have a positive effect if it ends soon,” he said. Contact Greg Knowler at greg.knowler@spglobal.com .

War adding $40-$50 million per week to Hapag-Lloyd's costs: CEO

<div class="phx-topic abstract-wrapper">Stocks that were already in the fuel supply chain and en route to refueling hubs when the Middle East conflict started have now been delivered, and those ports are running down their inventories.</div>

Stocks that were already in the fuel supply chain and en route to refueling hubs when the Middle East conflict started have now been delivered, and those ports are running down their inventories.

<div class="phx-topic">The availability of bunker fuel in Asia for ocean carriers is manageable for now but beginning to tighten, and global suppliers warn that shortages will be felt around the world should the Strait of Hormuz remain closed to ship traffic for much longer. Meanwhile, carriers are deploying a range of strategic operational and financial measures to mitigate the potential fuel shortages and the rising prices that will result. These include slow steaming to conserve fuel, filling ships in the US and Europe and transferring bunkers to Asia, and levying emergency fuel surcharges to recover rising costs. The implications of widening fuel shortages on container shipping operations could be profound, according to Erik Deventak, chief technology and data officer at rate benchmarking platform Xeneta. “In a worst-case scenario, any bunker shortage will hit supply because a carrier cannot run as many ships,” he said. “There’s no way around it and carriers will eventually need to reduce supply, likely through blank sailings.” While Deventak added a caveat — “realistically, no one is fully aware of what the scale of the bunker shortages could be” — he said the carriers would need to be selective on which services they were prepared to operate and which would be suspended. Hapag-Lloyd spokesperson Tim Seifert said the impact on the carrier’s operations so far was “limited and manageable,” but that Hapag was taking contingency measures to mitigate potential shortfalls. “We are taking on more fuel in ports where we would normally buy less to keep stock levels high,” he said. “As a fallback, we are considering bunker-only calls, but this has not been necessary so far.” About one-fifth of the world’s crude oil and refined products — 20 million barrels per day — is exported via the Strait of Hormuz, but that slowed to a trickle after the US and Israel began air strikes on Iran on Feb. 28. Export volumes of crude and refined products exiting the strait are currently at less than 10% of pre-war levels, forcing fuel suppliers across the region to reduce or shut down production. Bunker stocks that were already in the fuel supply chain and en route to refueling hubs when the war started have now been delivered, and those ports are running down their inventories. With Hormuz essentially unavailable to commercial shipping, there is no replenishment inbound. “If the Strait of Hormuz were to remain inaccessible, we would expect the market to tighten further — not only across Asia, but also into Europe and potentially parts of Africa,” Mikkel Kannegaard, head of global supply at Bunker Holding Group, the world’s largest bunker fuel supplier and trader, told the Journal of Commerce. “In Asia, availability remains acceptable so far, although supply uncertainty and backwardation are pushing up the delivery premiums,” he added. “At this stage, supply in Singapore and China appears to be holding up and looks manageable into April.” Backwardation is a market structure in which the spot price of a commodity is higher than its futures price, which can be a sign of supply disruptions. <h3>Emergency reserves inbound </h3>To address disruptions to oil markets stemming from the war in the Middle East, the 32 member countries of the International Energy Agency (IEA) on March 11 agreed to make 400 million barrels of oil from their emergency reserves available to the market. While the market has welcomed the measure, the fuel-strapped markets in Asia will not see the emergency reserves for at least two months, according to Sebastiaan Kosman, founder of bunker fuel analytics firm Spotbarge. “Even if you ship the oil now from the Amsterdam, Rotterdam, Antwerp area [known as ARA] to Asia, it will take two months to get the product loaded, shipped and refined,” Kosman said. Container shipping uses a range of different fuels, predominantly very low sulfur fuel oil (VLSFO), high sulfur fuel oil (HSFO) and low-sulfur marine gasoil (MGO). Liquefied natural gas (LNG) demand is increasing as more dual-fuel ships hit the water, but its usage depends on its price differential compared with conventional fuels, particularly MGO. Bunker fuel prices soared when the war began but have fallen over the past few days. The March 24 prices from Singapore assessed by industry platform Ship &amp; Bunker show VLSFO up 71% since late February at $894 per metric ton but down 10% since the start of the week. MGO is up 151% at $1,784/metric ton but has fallen 8% this week. The largest pricing decline was from HSFO. After rising 146% since the end of February to a high of $1,073/mt on March 9, the heavy fuel dropped steadily to $712/mt by March 24. Rotterdam fuel prices have also fallen this week and are substantially lower than Singapore. As of March 24, VLSFO was at $757/mt, up 54% compared with Feb. 27; MGO at $1,334/mt was almost double the pre-conflict level, and HSFO was up 63% at $714/mt, according to Ship &amp; Bunker. Kosman said Singapore’s crude oil comes from the Middle East and the supply chain disruption was widening the bunker fuel price differential between Singapore and Rotterdam. “That already gives you indication that Singapore is really tight,” he noted. “If Hormuz remains closed in the long term, bunkers in Singapore, Korea or Japan will be empty way earlier than terminals in Antwerp and Rotterdam.” <h3>Offsetting fuel price impact </h3>To recover bunker costs that comprise half their operating expenses, <a href="https://www.joc.com/article/war-reignites-tussle-between-ocean-carriers-cargo-owners-over-fuel-surcharges-6188632">carriers have rolled out emergency fuel surcharges</a> on top of the quarterly bunker adjustment factors (BAFs) that were no match for fuel prices that doubled in two weeks. Analysts at investment bank Jefferies said in a note to customers this week that rates would need to strengthen by 15% to fully offset the impact of rising fuel prices, which would be challenging given the <a href="https://www.joc.com/article/scrapping-strategy-looms-large-in-2026-as-carriers-manage-growing-oversupply-6168918">excess capacity in the market.</a>On Monday, the US Federal Maritime Commission <a href="https://www.joc.com/article/fmc-rejects-requests-by-carriers-to-waive-waiting-period-for-middle-east-surcharges-6191881">unanimously rejected separate requests from four ocean carriers</a> to waive a 30-day notice period to implement surcharges tied to the war in the Middle East, forcing the four to wait until early April to charge their shipper customers. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ef167537-108b-4e1b-ac11-43e99f815839"></dynamic-object></div>Meanwhile, spot rates on the Asia outbound trade lanes rose through March but have softened on Asia-Europe and flattened or even fallen on some trans-Pacific routes, according to the various pricing indexes tracked by the Journal of Commerce. Asia-North Europe rates this week are 41% above their pre-war levels at $2,800 per FEU, while Asia-Mediterranean rates are up 34% at $3,800/FEU, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. However, prices on both trade lanes softened in the past week. Although rates from Asia to the US West and East coasts rose in the first week of the war, they have since fallen below Feb. 28 levels. Deventak said although the rising price of fuel will drive up the price of shipping in the short term, he noted that the underlying market fundamentals remained in place — an oversupply of vessel capacity and demand that has been softened by a weak global economy. “We have seen the initial shock to container shipping, but the ultimate supply and demand structure has not massively changed since the conflict escalated, and it is this supply-demand balance that carries most weight in driving freight rates rather than carriers’ costs,” he said. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

The availability of bunker fuel in Asia for ocean carriers is manageable for now but beginning to tighten, and global suppliers warn that shortages will be felt around the world should the Strait of Hormuz remain closed to ship traffic for much longer. Meanwhile, carriers are deploying a range of strategic operational and financial measures to mitigate the potential fuel shortages and the rising prices that will result. These include slow steaming to conserve fuel, filling ships in the US and Europe and transferring bunkers to Asia, and levying emergency fuel surcharges to recover rising costs. The implications of widening fuel shortages on container shipping operations could be profound, according to Erik Deventak, chief technology and data officer at rate benchmarking platform Xeneta. “In a worst-case scenario, any bunker shortage will hit supply because a carrier cannot run as many ships,” he said. “There’s no way around it and carriers will eventually need to reduce supply, likely through blank sailings.” While Deventak added a caveat — “realistically, no one is fully aware of what the scale of the bunker shortages could be” — he said the carriers would need to be selective on which services they were prepared to operate and which would be suspended. Hapag-Lloyd spokesperson Tim Seifert said the impact on the carrier’s operations so far was “limited and manageable,” but that Hapag was taking contingency measures to mitigate potential shortfalls. “We are taking on more fuel in ports where we would normally buy less to keep stock levels high,” he said. “As a fallback, we are considering bunker-only calls, but this has not been necessary so far.” About one-fifth of the world’s crude oil and refined products — 20 million barrels per day — is exported via the Strait of Hormuz, but that slowed to a trickle after the US and Israel began air strikes on Iran on Feb. 28. Export volumes of crude and refined products exiting the strait are currently at less than 10% of pre-war levels, forcing fuel suppliers across the region to reduce or shut down production. Bunker stocks that were already in the fuel supply chain and en route to refueling hubs when the war started have now been delivered, and those ports are running down their inventories. With Hormuz essentially unavailable to commercial shipping, there is no replenishment inbound. “If the Strait of Hormuz were to remain inaccessible, we would expect the market to tighten further — not only across Asia, but also into Europe and potentially parts of Africa,” Mikkel Kannegaard, head of global supply at Bunker Holding Group, the world’s largest bunker fuel supplier and trader, told the Journal of Commerce. “In Asia, availability remains acceptable so far, although supply uncertainty and backwardation are pushing up the delivery premiums,” he added. “At this stage, supply in Singapore and China appears to be holding up and looks manageable into April.” Backwardation is a market structure in which the spot price of a commodity is higher than its futures price, which can be a sign of supply disruptions. Emergency reserves inbound To address disruptions to oil markets stemming from the war in the Middle East, the 32 member countries of the International Energy Agency (IEA) on March 11 agreed to make 400 million barrels of oil from their emergency reserves available to the market. While the market has welcomed the measure, the fuel-strapped markets in Asia will not see the emergency reserves for at least two months, according to Sebastiaan Kosman, founder of bunker fuel analytics firm Spotbarge. “Even if you ship the oil now from the Amsterdam, Rotterdam, Antwerp area [known as ARA] to Asia, it will take two months to get the product loaded, shipped and refined,” Kosman said. Container shipping uses a range of different fuels, predominantly very low sulfur fuel oil (VLSFO), high sulfur fuel oil (HSFO) and low-sulfur marine gasoil (MGO). Liquefied natural gas (LNG) demand is increasing as more dual-fuel ships hit the water, but its usage depends on its price differential compared with conventional fuels, particularly MGO. Bunker fuel prices soared when the war began but have fallen over the past few days. The March 24 prices from Singapore assessed by industry platform Ship & Bunker show VLSFO up 71% since late February at $894 per metric ton but down 10% since the start of the week. MGO is up 151% at $1,784/metric ton but has fallen 8% this week. The largest pricing decline was from HSFO. After rising 146% since the end of February to a high of $1,073/mt on March 9, the heavy fuel dropped steadily to $712/mt by March 24. Rotterdam fuel prices have also fallen this week and are substantially lower than Singapore. As of March 24, VLSFO was at $757/mt, up 54% compared with Feb. 27; MGO at $1,334/mt was almost double the pre-conflict level, and HSFO was up 63% at $714/mt, according to Ship & Bunker. Kosman said Singapore’s crude oil comes from the Middle East and the supply chain disruption was widening the bunker fuel price differential between Singapore and Rotterdam. “That already gives you indication that Singapore is really tight,” he noted. “If Hormuz remains closed in the long term, bunkers in Singapore, Korea or Japan will be empty way earlier than terminals in Antwerp and Rotterdam.” Offsetting fuel price impact To recover bunker costs that comprise half their operating expenses, carriers have rolled out emergency fuel surcharges on top of the quarterly bunker adjustment factors (BAFs) that were no match for fuel prices that doubled in two weeks. Analysts at investment bank Jefferies said in a note to customers this week that rates would need to strengthen by 15% to fully offset the impact of rising fuel prices, which would be challenging given the excess capacity in the market. On Monday, the US Federal Maritime Commission unanimously rejected separate requests from four ocean carriers to waive a 30-day notice period to implement surcharges tied to the war in the Middle East, forcing the four to wait until early April to charge their shipper customers. Meanwhile, spot rates on the Asia outbound trade lanes rose through March but have softened on Asia-Europe and flattened or even fallen on some trans-Pacific routes, according to the various pricing indexes tracked by the Journal of Commerce. Asia-North Europe rates this week are 41% above their pre-war levels at $2,800 per FEU, while Asia-Mediterranean rates are up 34% at $3,800/FEU, according to Platts, a sister company of the Journal of Commerce within S&P Global. However, prices on both trade lanes softened in the past week. Although rates from Asia to the US West and East coasts rose in the first week of the war, they have since fallen below Feb. 28 levels. Deventak said although the rising price of fuel will drive up the price of shipping in the short term, he noted that the underlying market fundamentals remained in place — an oversupply of vessel capacity and demand that has been softened by a weak global economy. “We have seen the initial shock to container shipping, but the ultimate supply and demand structure has not massively changed since the conflict escalated, and it is this supply-demand balance that carries most weight in driving freight rates rather than carriers’ costs,” he said. Contact Greg Knowler at greg.knowler@spglobal.com .

Bunker fuel shortages in Asia at tipping point as war disruption continues

<div class="phx-topic abstract-wrapper">The announced cuts come one month after WiseTech Global said it would be laying off 30% of its workforce over the next two years, also in an AI-related move. </div>

The announced cuts come one month after WiseTech Global said it would be laying off 30% of its workforce over the next two years, also in an AI-related move.

<div class="phx-topic">Freightos on Thursday announced it is reducing its workforce by up to 15% in the near future as part of an effort to adapt to the fast-moving impact artificial intelligence is having on software development. The company, which provides global freight pricing, booking and procurement products to forwarders and shippers, said the cuts will affect about 55 positions in a mix of layoffs and cancellation of planned backfills. “With what’s happening with software and data in the industry around AI, we felt we needed to be set up for scalability long-term,” Freightos Chief Strategy Officer Ian Arroyo told the Journal of Commerce. “And to make sure our teams are structured in a more efficient and effective way going forward.” The announced cuts come one month after WiseTech Global, the largest provider of software to global logistics providers, <a href="https://www.joc.com/article/wisetech-says-to-cut-nearly-30-of-workforce-as-it-preps-for-ai-era-6175881">said it would be laying off 30% of its workforce</a> over the next two years, also in an AI-related move. Arroyo said publicly-traded Freightos had signaled in its fourth-quarter 2025 earnings call in February, its first since founder Zvi Schreiber stepped down as CEO Jan. 31, that the company was shifting from a transactions-focused approach to a solutions-focused approach. Freightos, founded in 2012, had built its presence in ocean freight through a transactions-oriented marketplace before acquiring WebCargo, a pricing solutions provider in the air freight industry, in 2016. “The strategy going forward is we’re going to be solutions focused first, with transactions to come later as a result of that,” Arroyo said. “Our commitment is to be ready for profitability [by the end of 2026]. We’re supporting thousands of forwarders, including all of the top 20, and we needed to make some changes to the organization.” More broadly, a number of technology companies, from Oracle to Amazon to fintech solutions provider Block, have announced layoffs in light of the oncoming march of AI. In particular, the companies have cited AI agents as being able to replace roles in programming, product development and customer service. Traditionally, layoffs at publicly traded companies have been seen as a negative, but more recently, markets have viewed such actions positively, as a sign of companies adapting to the realities of accommodating more digital workers. Arroyo agreed that was a factor in Freightos’ decision-making. “100 percent,” he said. “This is about rightsizing teams in light of the AI revolution. How we support and build and go to market, all of that has to adjust.” <h3>‘Difficult but ... necessary’ decision </h3>Arroyo said that while it might be prudent for software users to be conservative about investment in AI given how fast the environment is moving, software vendors don’t have that luxury. “Maybe the head of global logistics can sit on the sidelines and wait right now,” he said. “But those of us actually building the software, we better be in a position that we can enable the shifts [customers] need or want to make, while ensuring the continuity of the backbones of what they run their businesses on.” Newly appointed Freightos CEO Pablo Pinillos emphasized that the layoffs will help the company reach its goal of being profitable by the end of the year. “These types of decisions are very difficult, but this is a necessary step to ensure Freightos is positioned for long-term, sustainable growth in a dynamic market,” Pinillos said in a statement Thursday. Freightos estimates it will incur approximately $1.3 million in one-time restructuring charges, primarily related to severance and employee benefits, over the first nine months of 2026. But it expects the restructuring to generate annualized cost savings of approximately $4.5 million starting in the fourth quarter of this year. The company had revenue of $29.5 million in 2025, a 24% increase year over year, while it posted an earnings before interest, taxes, depreciation and amortization loss of $11.2 million, compared with a $12.6 million loss in 2024. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Freightos on Thursday announced it is reducing its workforce by up to 15% in the near future as part of an effort to adapt to the fast-moving impact artificial intelligence is having on software development. The company, which provides global freight pricing, booking and procurement products to forwarders and shippers, said the cuts will affect about 55 positions in a mix of layoffs and cancellation of planned backfills. “With what’s happening with software and data in the industry around AI, we felt we needed to be set up for scalability long-term,” Freightos Chief Strategy Officer Ian Arroyo told the Journal of Commerce. “And to make sure our teams are structured in a more efficient and effective way going forward.” The announced cuts come one month after WiseTech Global, the largest provider of software to global logistics providers, said it would be laying off 30% of its workforce over the next two years, also in an AI-related move. Arroyo said publicly-traded Freightos had signaled in its fourth-quarter 2025 earnings call in February, its first since founder Zvi Schreiber stepped down as CEO Jan. 31, that the company was shifting from a transactions-focused approach to a solutions-focused approach. Freightos, founded in 2012, had built its presence in ocean freight through a transactions-oriented marketplace before acquiring WebCargo, a pricing solutions provider in the air freight industry, in 2016. “The strategy going forward is we’re going to be solutions focused first, with transactions to come later as a result of that,” Arroyo said. “Our commitment is to be ready for profitability [by the end of 2026]. We’re supporting thousands of forwarders, including all of the top 20, and we needed to make some changes to the organization.” More broadly, a number of technology companies, from Oracle to Amazon to fintech solutions provider Block, have announced layoffs in light of the oncoming march of AI. In particular, the companies have cited AI agents as being able to replace roles in programming, product development and customer service. Traditionally, layoffs at publicly traded companies have been seen as a negative, but more recently, markets have viewed such actions positively, as a sign of companies adapting to the realities of accommodating more digital workers. Arroyo agreed that was a factor in Freightos’ decision-making. “100 percent,” he said. “This is about rightsizing teams in light of the AI revolution. How we support and build and go to market, all of that has to adjust.” ‘Difficult but ... necessary’ decision Arroyo said that while it might be prudent for software users to be conservative about investment in AI given how fast the environment is moving, software vendors don’t have that luxury. “Maybe the head of global logistics can sit on the sidelines and wait right now,” he said. “But those of us actually building the software, we better be in a position that we can enable the shifts [customers] need or want to make, while ensuring the continuity of the backbones of what they run their businesses on.” Newly appointed Freightos CEO Pablo Pinillos emphasized that the layoffs will help the company reach its goal of being profitable by the end of the year. “These types of decisions are very difficult, but this is a necessary step to ensure Freightos is positioned for long-term, sustainable growth in a dynamic market,” Pinillos said in a statement Thursday. Freightos estimates it will incur approximately $1.3 million in one-time restructuring charges, primarily related to severance and employee benefits, over the first nine months of 2026. But it expects the restructuring to generate annualized cost savings of approximately $4.5 million starting in the fourth quarter of this year. The company had revenue of $29.5 million in 2025, a 24% increase year over year, while it posted an earnings before interest, taxes, depreciation and amortization loss of $11.2 million, compared with a $12.6 million loss in 2024. Contact Eric Johnson at eric.johnson@spglobal.com .

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Freightos to trim up to 15% of headcount amid AI adaptation process

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<div class="phx-topic abstract-wrapper">Agency Chairman Laura DiBella said the “intensified inspections” of the vessels appear to be retaliation for Panama canceling the port concessions held at Balboa and Cristóbal by a subsidiary of Hong Kong-based Hutchison. </div>

Agency Chairman Laura DiBella said the “intensified inspections” of the vessels appear to be retaliation for Panama canceling the port concessions held at Balboa and Cristóbal by a subsidiary of Hong Kong-based Hutchison.

<div class="phx-topic">The US Federal Maritime Commission (FMC) is “closely monitoring” an apparent “surge” in detentions of Panama-flag ships by Chinese port authorities and the effect it could have on US container trade, according to the agency’s chairman. Laura DiBella says the moves appear to be retaliation <a href="https://www.joc.com/article/panama-court-voids-ck-hutchison-canal-terminal-leases-6161145">for the Panamanian Supreme Court recently nullifying</a> the operating concessions at Panama’s Balboa and Cristóbal ports that were held for 28 years by Panama Ports Company (PPC), which is 90% owned by Hong Kong-based conglomerate CK Hutchison Holdings. DiBella, in a statement Thursday she said represented her views and not the FMC’s, said the detentions of Panama-flag ships in Chinese ports far exceed “historical norms.” “These intensified inspections were carried out under informal directives and appear intended to punish Panama after the transfer of Hutchison’s port assets,” she said. “Given that Panama‑flagged ships carry a meaningful share of US containerized trade, these actions could result in significant commercial and strategic consequences to US shipping.” DiBella did not say the FMC was doing anything other than monitoring the situation, but noted the agency’s laws give it authority to investigate “whether regulations or practices of foreign governments result in conditions unfavorable to shipping in the foreign trade of the United States.” With PPC removed from its operatorship, Maersk’s APM Terminals <a href="https://www.joc.com/article/maersk-msc-units-begin-interim-management-of-panama-canal-terminals-6175167">was given a transitory concession contract</a> for the Balboa terminal on the Pacific side of the Panama Canal by the Panama Maritime Authority (PMA), while MSC’s Terminal Investment Limited was given the same for Cristóbal on the Atlantic coast. Both contracts are for 18 months. Hutchison has responded by <a href="https://www.joc.com/article/hutchison-seeks-2-billion-in-damages-from-panama-after-terminal-deal-canceled-6183273">filing an international arbitration claim</a> against the Panamanian government and PMA in which it seeks more than $2 billion in damages. China’s Cosco Shipping Lines earlier this month <a href="https://www.joc.com/article/cosco-halts-balboa-calls-in-latest-twist-over-panama-port-row-6185309">halted calls at Balboa</a> and instead is redirecting its services to Manzanillo on the Atlantic side of the canal. Contact Kevin Saville at <a href="mailto:kevin.saville2@spglobal.com">kevin.saville2@spglobal.com</a>. </div>

The US Federal Maritime Commission (FMC) is “closely monitoring” an apparent “surge” in detentions of Panama-flag ships by Chinese port authorities and the effect it could have on US container trade, according to the agency’s chairman. Laura DiBella says the moves appear to be retaliation for the Panamanian Supreme Court recently nullifying the operating concessions at Panama’s Balboa and Cristóbal ports that were held for 28 years by Panama Ports Company (PPC), which is 90% owned by Hong Kong-based conglomerate CK Hutchison Holdings. DiBella, in a statement Thursday she said represented her views and not the FMC’s, said the detentions of Panama-flag ships in Chinese ports far exceed “historical norms.” “These intensified inspections were carried out under informal directives and appear intended to punish Panama after the transfer of Hutchison’s port assets,” she said. “Given that Panama‑flagged ships carry a meaningful share of US containerized trade, these actions could result in significant commercial and strategic consequences to US shipping.” DiBella did not say the FMC was doing anything other than monitoring the situation, but noted the agency’s laws give it authority to investigate “whether regulations or practices of foreign governments result in conditions unfavorable to shipping in the foreign trade of the United States.” With PPC removed from its operatorship, Maersk’s APM Terminals was given a transitory concession contract for the Balboa terminal on the Pacific side of the Panama Canal by the Panama Maritime Authority (PMA), while MSC’s Terminal Investment Limited was given the same for Cristóbal on the Atlantic coast. Both contracts are for 18 months. Hutchison has responded by filing an international arbitration claim against the Panamanian government and PMA in which it seeks more than $2 billion in damages. China’s Cosco Shipping Lines earlier this month halted calls at Balboa and instead is redirecting its services to Manzanillo on the Atlantic side of the canal. Contact Kevin Saville at kevin.saville2@spglobal.com .

Trans-Pacific

FMC ‘monitoring’ recent detention of Panama-flag ships at Chinese ports

<div class="phx-topic abstract-wrapper">With operations at Salalah suspended on Saturday due to a drone strike, Hapag-Lloyd has positioned its upcoming westbound sailing on the India-USEC “TPI” service to call at Port Qasim in Pakistan. </div>

With operations at Salalah suspended on Saturday due to a drone strike, Hapag-Lloyd has positioned its upcoming westbound sailing on the India-USEC “TPI” service to call at Port Qasim in Pakistan.

<div class="phx-topic">Stop-and-start operations at Salalah Port in Oman are adding to the schedule challenges that had already forced major carriers on the Indian westbound trades to rework their network rotations in response to the Middle East crisis. Salalah remains a critical hub for Maersk and Hapag-Lloyd, both for the Gemini Cooperation India-Europe/Mediterranean loop and their standalone India-US East Coast services. With operations at Salalah suspended on Saturday due to a drone strike, although <a href="https://www.joc.com/article/drone-strike-closes-key-middle-east-transit-hub-of-salalah-6195094">gradually resuming from Tuesday</a>, Hapag-Lloyd has now positioned its upcoming westbound sailing on the India-USEC “TPI” service to call at Port Qasim (Karachi) in Pakistan. The Niledutch Lion has an estimated time of arrival of April 9 in Karachi after a scheduled departure from India’s Mundra port on April 7, updated data shows. Hapag-Lloyd last year halted calls to Karachi following the country-to-country trade restrictions between India and Pakistan, and instead has been connecting Pakistan cargo via Salalah by using common feeder capacity. Maersk did not immediately disclose its contingency plans for Indian regional transshipment affected by the Salalah shutdown. All the vessels deployed on the Gemini India-Europe loop, known as the ME1 for Maersk and the IOS for Hapag-Lloyd, are from the Danish liner. <h3>Multi-modal solutions </h3>Meanwhile, ocean carriers are rapidly shifting from port-to-port shipping to <a href="https://www.joc.com/article/as-war-rages-multimodal-demand-surges-on-asia-europe-landbridge-6185162">integrated regional multimodal solutions</a> to handle imports into the Middle East, an alternative supply chain model that industry observers believe could outlast the war as cargo interests seek reliability and resilience in the supply chain. Supporting that transformation, there have been a series of collaborative attempts by Persian Gulf states, including the United Arab Emirates, Oman and Saudi Arabia, to establish “land bridges” by trucking and/or “green corridors” through sea-land networks for cargo flows within the region. One example is a strategic partnership between the UAE’s Gulftainer and the Saudi Ports Authority (Mawani) to open alternative logistics links between Sharjah in the UAE and Dammam in Saudi Arabia. Additionally, Saudi Arabia is offering an extended 60-day free time for the storage of Gulf import/export containers in addition to implementing multiple regulatory relaxations, including raising the permitted operational age of trucks in the country from 20 years to 22 years. Major liners have also stepped up the evacuation of Middle East-bound containers rerouted to Indian ports. Hapag-Lloyd this week has a shuttle sailing from Nhava Sheva in West India to Fujairah in the UAE, with onward connections available for Jebel Ali by trucking. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Stop-and-start operations at Salalah Port in Oman are adding to the schedule challenges that had already forced major carriers on the Indian westbound trades to rework their network rotations in response to the Middle East crisis. Salalah remains a critical hub for Maersk and Hapag-Lloyd, both for the Gemini Cooperation India-Europe/Mediterranean loop and their standalone India-US East Coast services. With operations at Salalah suspended on Saturday due to a drone strike, although gradually resuming from Tuesday , Hapag-Lloyd has now positioned its upcoming westbound sailing on the India-USEC “TPI” service to call at Port Qasim (Karachi) in Pakistan. The Niledutch Lion has an estimated time of arrival of April 9 in Karachi after a scheduled departure from India’s Mundra port on April 7, updated data shows. Hapag-Lloyd last year halted calls to Karachi following the country-to-country trade restrictions between India and Pakistan, and instead has been connecting Pakistan cargo via Salalah by using common feeder capacity. Maersk did not immediately disclose its contingency plans for Indian regional transshipment affected by the Salalah shutdown. All the vessels deployed on the Gemini India-Europe loop, known as the ME1 for Maersk and the IOS for Hapag-Lloyd, are from the Danish liner. Multi-modal solutions Meanwhile, ocean carriers are rapidly shifting from port-to-port shipping to integrated regional multimodal solutions to handle imports into the Middle East, an alternative supply chain model that industry observers believe could outlast the war as cargo interests seek reliability and resilience in the supply chain. Supporting that transformation, there have been a series of collaborative attempts by Persian Gulf states, including the United Arab Emirates, Oman and Saudi Arabia, to establish “land bridges” by trucking and/or “green corridors” through sea-land networks for cargo flows within the region. One example is a strategic partnership between the UAE’s Gulftainer and the Saudi Ports Authority (Mawani) to open alternative logistics links between Sharjah in the UAE and Dammam in Saudi Arabia. Additionally, Saudi Arabia is offering an extended 60-day free time for the storage of Gulf import/export containers in addition to implementing multiple regulatory relaxations, including raising the permitted operational age of trucks in the country from 20 years to 22 years. Major liners have also stepped up the evacuation of Middle East-bound containers rerouted to Indian ports. Hapag-Lloyd this week has a shuttle sailing from Nhava Sheva in West India to Fujairah in the UAE, with onward connections available for Jebel Ali by trucking. Contact Bency Mathew at bencyvmathew@gmail.com .

Asia-Europe

Salalah disruptions send carriers on Indian trades back to adding Pakistan calls

<div class="phx-topic abstract-wrapper">The Omani port operated by APM Terminals is one of the alternative container drop-off points in the region being used by ocean carriers unable to pass through the Strait of Hormuz. </div>

The Omani port operated by APM Terminals is one of the alternative container drop-off points in the region being used by ocean carriers unable to pass through the Strait of Hormuz.

<div class="phx-topic">A drone strike on Saturday closed the APM Terminals (AMPT) regional hub of Salalah in Oman, disrupting operations at one of the key access points for containers being offloaded and trucked overland to Persian Gulf markets that are otherwise inaccessible by ocean due to the war. One port worker was injured in the attack, and a container terminal crane was damaged. No one has claimed responsibility for the strike, although some media is reporting that the drones were fired by Houthi militants in neighboring Yemen. APMT owner Maersk said in a customer advisory Monday that Salalah will gradually resume operations beginning Tuesday, although operational constraints “might remain for some time.” “Additional precautionary security measures have been implemented at the port, and we remain in contact with the relevant authorities and port stakeholders,” the carrier said. Following the attack, Hapag-Lloyd announced that its vessel Lisbon Express has been moved out of the port “as a precautionary measure.” With the Strait of Hormuz effectively closed to commercial shipping, ocean carriers are discharging containers in ports near the Persian Gulf, such as Salalah and Sohar in Oman and Khor Fakkan and Fujairah in the UAE. The cargo is then trucked vast distances inland to the United Arab Emirates, Qatar, Bahrain, Kuwait and Iraq. But customer advisories from forwarders and ocean carriers paint a picture of growing congestion across regional overland networks. Crane Worldwide Logistics said Khor Fakkan congestion was at 100% with wait times longer than 11 days and “vessel queues and dwell times unrelenting.” The region’s main port hub of Jebel Ali is experiencing systemic backlogs with DP World’s emergency land corridors to Dammam in Saudi Arabia and Sohar providing only marginal landside relief. Cross-border trucking capacity shortages persist in key corridors and are most acute in Oman, the UAE’s Fujairah, and Saudi Arabia, Crane noted. The landside disruption for cargo was exacerbated by the Eid holidays and flooding from a severe storm that lashed the UAE last week. Rolf Habben Jansen, CEO of Hapag-Lloyd, <a href="https://www.joc.com/article/war-adding-40-50-million-per-week-to-hapag-lloyds-costs-ceo-6193532">told reporters during a briefing last week</a> that the carrier was trying to come up with overland solutions for customer cargo that is stranded short of its Persian Gulf destinations. “But capacity there is limited, and that means it is possible for things that are urgent or critical, but it is not possible for the volume that normally would be carried via the water,” Habben Jansen said. “There is simply not enough inland infrastructure and there are not enough trucks to support that,” he added. <h3>Trucking costs rising </h3>It is not only inbound containers that are impacted by the ongoing conflict. The Journal of Commerce has been told that a shipper with containers that urgently need exporting from the Persian Gulf in the next two months is paying $15,000 per container to truck 140 boxes across Saudi Arabia to the port of Jeddah on the Red Sea. That figure was far above the current $2,000-$6,000 per container market price for a cross-desert truck journey from the UAE to Jeddah, according to the Middle East CEO for a global forwarder, who added the $15,000 per box was likely escalated by the urgent nature of the shipment. Still, the forwarder said trucking complications across the Gulf Cooperation Council (GCC) countries — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE — extended well beyond high rates. “For example, if you have a Saudi truck and want to drive to an Omani port, it’s not possible,” the source told the Journal of Commerce. “They are currently making some exceptions, but we have just learned that Oman will charge an entry fee per tire.” Another problem that has been escalated by the conflict, according to the executive, is the issuing of visas. “There is so much more cross-border trucking now and drivers need to queue for half a day and longer to get a visa,” he said. “That limits the number of journeys a trucker can make, it creates delays and traffic backlogs, and inflates the price.” <h3>Operational restrictions </h3>Crane Worldwide Logistics said a new operational restriction now in effect bars drivers of Syrian, Pakistani and Yemeni nationality from entering Qatar, directly impacting road-based freight operations in and out of the country. With ocean cargo handling suspended in the Qatari port of Doha, the Crane advisory said containers already discharged in the region were accruing storage charges daily and the driver nationality ban was limiting the ability of cargo owners to collect and move their boxes. Michael Aldwell, executive vice president of sea logistics at Kuehne + Nagel, acknowledged that trucking capacity was a challenge, but said the forwarder had a road network in place before the conflict that it was able to utilize. Priority was being given to transporting healthcare and perishable cargo into the Middle East. “To keep cargo moving, we are working on solutions to find alternative gateways and corridors with trucks into the Persian Gulf markets, such as cross-border trucking between Sohar or Khor Fakkan, and via Mersin [Turkey] or Aqaba [Jordan],” Aldwell told the Journal of Commerce. “We are also implementing air-road solutions via airports in Saudi Arabia [Jeddah] and Oman [Salalah] with cross-border trucking to the UAE, Qatar, Bahrain and Kuwait,” he added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

A drone strike on Saturday closed the APM Terminals (AMPT) regional hub of Salalah in Oman, disrupting operations at one of the key access points for containers being offloaded and trucked overland to Persian Gulf markets that are otherwise inaccessible by ocean due to the war. One port worker was injured in the attack, and a container terminal crane was damaged. No one has claimed responsibility for the strike, although some media is reporting that the drones were fired by Houthi militants in neighboring Yemen. APMT owner Maersk said in a customer advisory Monday that Salalah will gradually resume operations beginning Tuesday, although operational constraints “might remain for some time.” “Additional precautionary security measures have been implemented at the port, and we remain in contact with the relevant authorities and port stakeholders,” the carrier said. Following the attack, Hapag-Lloyd announced that its vessel Lisbon Express has been moved out of the port “as a precautionary measure.” With the Strait of Hormuz effectively closed to commercial shipping, ocean carriers are discharging containers in ports near the Persian Gulf, such as Salalah and Sohar in Oman and Khor Fakkan and Fujairah in the UAE. The cargo is then trucked vast distances inland to the United Arab Emirates, Qatar, Bahrain, Kuwait and Iraq. But customer advisories from forwarders and ocean carriers paint a picture of growing congestion across regional overland networks. Crane Worldwide Logistics said Khor Fakkan congestion was at 100% with wait times longer than 11 days and “vessel queues and dwell times unrelenting.” The region’s main port hub of Jebel Ali is experiencing systemic backlogs with DP World’s emergency land corridors to Dammam in Saudi Arabia and Sohar providing only marginal landside relief. Cross-border trucking capacity shortages persist in key corridors and are most acute in Oman, the UAE’s Fujairah, and Saudi Arabia, Crane noted. The landside disruption for cargo was exacerbated by the Eid holidays and flooding from a severe storm that lashed the UAE last week. Rolf Habben Jansen, CEO of Hapag-Lloyd, told reporters during a briefing last week that the carrier was trying to come up with overland solutions for customer cargo that is stranded short of its Persian Gulf destinations. “But capacity there is limited, and that means it is possible for things that are urgent or critical, but it is not possible for the volume that normally would be carried via the water,” Habben Jansen said. “There is simply not enough inland infrastructure and there are not enough trucks to support that,” he added. Trucking costs rising It is not only inbound containers that are impacted by the ongoing conflict. The Journal of Commerce has been told that a shipper with containers that urgently need exporting from the Persian Gulf in the next two months is paying $15,000 per container to truck 140 boxes across Saudi Arabia to the port of Jeddah on the Red Sea. That figure was far above the current $2,000-$6,000 per container market price for a cross-desert truck journey from the UAE to Jeddah, according to the Middle East CEO for a global forwarder, who added the $15,000 per box was likely escalated by the urgent nature of the shipment. Still, the forwarder said trucking complications across the Gulf Cooperation Council (GCC) countries — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE — extended well beyond high rates. “For example, if you have a Saudi truck and want to drive to an Omani port, it’s not possible,” the source told the Journal of Commerce. “They are currently making some exceptions, but we have just learned that Oman will charge an entry fee per tire.” Another problem that has been escalated by the conflict, according to the executive, is the issuing of visas. “There is so much more cross-border trucking now and drivers need to queue for half a day and longer to get a visa,” he said. “That limits the number of journeys a trucker can make, it creates delays and traffic backlogs, and inflates the price.” Operational restrictions Crane Worldwide Logistics said a new operational restriction now in effect bars drivers of Syrian, Pakistani and Yemeni nationality from entering Qatar, directly impacting road-based freight operations in and out of the country. With ocean cargo handling suspended in the Qatari port of Doha, the Crane advisory said containers already discharged in the region were accruing storage charges daily and the driver nationality ban was limiting the ability of cargo owners to collect and move their boxes. Michael Aldwell, executive vice president of sea logistics at Kuehne + Nagel, acknowledged that trucking capacity was a challenge, but said the forwarder had a road network in place before the conflict that it was able to utilize. Priority was being given to transporting healthcare and perishable cargo into the Middle East. “To keep cargo moving, we are working on solutions to find alternative gateways and corridors with trucks into the Persian Gulf markets, such as cross-border trucking between Sohar or Khor Fakkan, and via Mersin [Turkey] or Aqaba [Jordan],” Aldwell told the Journal of Commerce. “We are also implementing air-road solutions via airports in Saudi Arabia [Jeddah] and Oman [Salalah] with cross-border trucking to the UAE, Qatar, Bahrain and Kuwait,” he added. Contact Greg Knowler at greg.knowler@spglobal.com .

Drayage

Drone strike closes key Middle East transit hub of Salalah

<div class="phx-topic abstract-wrapper">The World Shipping Council argued unsuccessfully that a section of OSRA-22 aimed at US exports was an overreach by the country’s maritime regulator. </div>

The World Shipping Council argued unsuccessfully that a section of OSRA-22 aimed at US exports was an overreach by the country’s maritime regulator.

<div class="phx-topic">An appeals court has denied a challenge to US shipping law that blocks ocean carriers from unfairly denying vessel space to exporters, ruling that the Federal Maritime Commission (FMC) has broad latitude to review a carrier’s rates and export policy when it believes such violations occur. A three-judge panel for the District of Columbia appellate court on Tuesday turned down <a href="https://www.joc.com/article/dc-court-hears-challenge-to-fmc-rulemaking-on-refusal-to-deal-6078353">the World Shipping Council’s (WSC’s) petition</a> to review a section of the Ocean Shipping Reform Act of 2022 (OSRA-22) that bars ocean carriers from “unreasonably refus[ing] to deal or negotiate ... with respect to vessel space accommodations.” The provision stemmed from <a href="https://www.joc.com/article/us-regulators-warn-container-lines-on-obligation-to-serve-exporters-5251170">the US agriculture industry’s difficulties in getting export space</a> during the COVID-19-era container shipping surge. After OSRA-22 was passed, a July 2024 rulemaking by the FMC sought to clarify how the agency would determine an unreasonable refusal to deal. The WSC claimed the rulemaking exceeded the FMC’s authority because it allowed the agency to review export freight rates, even though it gave up its ratemaking authority in 1984. The rulemaking also requires ocean carriers to document their export policies, which the WSC claimed also oversteps the agency’s powers, and removed references to “business decisions” as a factor in deciding whether an ocean carrier unreasonably refused to deal. However, the court ruled that even if the FMC no longer regulates rates, it can still review ocean freight rates if they appear to be dissuading an export container booking. The ruling said that removing the FMC’s authority to review export rates “would permit any ocean carrier to refuse to deal or to negotiate with impunity, simply by quoting an unrealistically high rate.” “There is no practical difference between quoting a rate of one billion dollars and outright refusing to deal,” the ruling said. The court also turned away the WSC’s argument that a documented export policy was government overreach because it is “prospective” information, not a factual recounting of what occurred in a particular instance. The judges said the FMC has authority under US shipping law to collect information about carrier pricing strategies and export policies. As for the exclusion of business decisions in the rulemaking, the judges said the rulemaking did not explicitly prevent the FMC from considering that factor in whether a shipper was unfairly denied vessel space. The FMC itself said that it could also consider business decisions. “Counsel for the Commission acknowledged that the Commission may not decline to consider a relevant business decision because failure to consider a relevant factor would itself be arbitrary,” the ruling said. “In short, the Commission did not meaningfully change course by dropping its main reference to business decisions.” <h3>Despite loss, WSC notes ‘clarity’ in ruling </h3>In a statement to the Journal of Commerce, WSC Chief Executive Joe Kramek said, “the ruling provides the liner shipping industry with clarity on the factors the [FMC] must consider in reviewing refusal-to-deal cases.” Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said in a statement the FMC’s refusal-to-deal rulemaking followed Congress’ intent on providing a level playing field for US exporters. “The provision in OSRA-22 and the subsequent FMC implementing regulation was designed to address refusals of ocean carriers to accept booking of many agriculture commodities during the COVID crisis,” Friedmann said. “Congress responded, on behalf of agriculture and other constituents, leading to this provision of OSRA-22. AgTC is pleased with the Court of Appeals decision denying efforts to derail this FMC regulation.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

An appeals court has denied a challenge to US shipping law that blocks ocean carriers from unfairly denying vessel space to exporters, ruling that the Federal Maritime Commission (FMC) has broad latitude to review a carrier’s rates and export policy when it believes such violations occur. A three-judge panel for the District of Columbia appellate court on Tuesday turned down the World Shipping Council’s (WSC’s) petition to review a section of the Ocean Shipping Reform Act of 2022 (OSRA-22) that bars ocean carriers from “unreasonably refus[ing] to deal or negotiate ... with respect to vessel space accommodations.” The provision stemmed from the US agriculture industry’s difficulties in getting export space during the COVID-19-era container shipping surge. After OSRA-22 was passed, a July 2024 rulemaking by the FMC sought to clarify how the agency would determine an unreasonable refusal to deal. The WSC claimed the rulemaking exceeded the FMC’s authority because it allowed the agency to review export freight rates, even though it gave up its ratemaking authority in 1984. The rulemaking also requires ocean carriers to document their export policies, which the WSC claimed also oversteps the agency’s powers, and removed references to “business decisions” as a factor in deciding whether an ocean carrier unreasonably refused to deal. However, the court ruled that even if the FMC no longer regulates rates, it can still review ocean freight rates if they appear to be dissuading an export container booking. The ruling said that removing the FMC’s authority to review export rates “would permit any ocean carrier to refuse to deal or to negotiate with impunity, simply by quoting an unrealistically high rate.” “There is no practical difference between quoting a rate of one billion dollars and outright refusing to deal,” the ruling said. The court also turned away the WSC’s argument that a documented export policy was government overreach because it is “prospective” information, not a factual recounting of what occurred in a particular instance. The judges said the FMC has authority under US shipping law to collect information about carrier pricing strategies and export policies. As for the exclusion of business decisions in the rulemaking, the judges said the rulemaking did not explicitly prevent the FMC from considering that factor in whether a shipper was unfairly denied vessel space. The FMC itself said that it could also consider business decisions. “Counsel for the Commission acknowledged that the Commission may not decline to consider a relevant business decision because failure to consider a relevant factor would itself be arbitrary,” the ruling said. “In short, the Commission did not meaningfully change course by dropping its main reference to business decisions.” Despite loss, WSC notes ‘clarity’ in ruling In a statement to the Journal of Commerce, WSC Chief Executive Joe Kramek said, “the ruling provides the liner shipping industry with clarity on the factors the [FMC] must consider in reviewing refusal-to-deal cases.” Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said in a statement the FMC’s refusal-to-deal rulemaking followed Congress’ intent on providing a level playing field for US exporters. “The provision in OSRA-22 and the subsequent FMC implementing regulation was designed to address refusals of ocean carriers to accept booking of many agriculture commodities during the COVID crisis,” Friedmann said. “Congress responded, on behalf of agriculture and other constituents, leading to this provision of OSRA-22. AgTC is pleased with the Court of Appeals decision denying efforts to derail this FMC regulation.” Contact Michael Angell at michael.angell@spglobal.com .

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