<div class="phx-topic abstract-wrapper">Hey there, world traveler. Looking for the perfect gift for friends and family back home? The duty-f</div>

Hey there, world traveler. Looking for the perfect gift for friends and family back home? The duty-f

<div>Hey there, world traveler. Looking for the perfect gift for friends and family back home? The duty-free shop at Washington's Dulles International Airport has just the thing.Raw meat.Amid the liquor and perfume at Dulles' duty-free shop is a meat counter with choice cuts of USDA-inspected beef, already trimmed and packaged for the road.And check these prices: six 8-ounce tenderloin steaks for $55. Or for the budget shopper, six strip steaks for $50.The proprietors are aware that most Americans would think $18 a pound for tenderloin steak is a little steep. But then, the duty-free shop isn't aiming at Americans.We have...

Hey there, world traveler. Looking for the perfect gift for friends and family back home? The duty-free shop at Washington's Dulles International Airport has just the thing. Raw meat.Amid the liquor and perfume at Dulles' duty-free shop is a meat counter with choice cuts of USDA-inspected beef, already trimmed and packaged for the road. And check these prices: six 8-ounce tenderloin steaks for $55. Or for the budget shopper, six strip steaks for $50. The proprietors are aware that most Americans would think $18 a pound for tenderloin steak is a little steep. But then, the duty-free shop isn't aiming at Americans. We have only one particular customer. That is the Japanese, said Hahn Nguyen, assistant manager at Dulles' duty-free shop. The thing is, in Japan, any kind of meat is very, very expensive. To the Japanese, whose beef costs three to four times the U.S. price, even U.S. airport prices are a bargain. A steak in a Tokyo restaurant would cost about $50. So after many requests from travelers, Dulles' duty-free shop six months ago installed a meat counter. The beef is vacuum-packed and frozen, then wrapped in foam and plastic so it won't spoil during those long trans-Pacific flights. It has to be good for 24 hours, Mr. Nguyen explained. The globe-trotting U.S. steaks could be regarded as just an international oddity - except that to U.S. meat groups, it highlights their frustrations with Japan's tightly controlled import market for U.S. beef. And it reminds them how lucrative the Japanese market could be. It tells you how much demand there is for beef in Japan, and the quota system that exists over there prevents the Japanese from getting it, said Tom Cook of the National Cattlemen's Association in Washington. On March 31, a four-year agreement on meat import quotas between the United States and Japan comes to an end, supposedly clearing the way for the United States to export as much meat to Japan as it wishes. But the Japanese are balking at that step, which is irritating some members of Congress. When we entered that agreement, they said they wouldn't have any more quotas, said Rep. Dan Glickman, D-Kan. Now that Japan appears to be foot- dragging, 17 House members have urged U.S. trade officials to use appropriate measures to pry open the Japanese beef markets - a move Mr. Glickman terms a symbolic shot across the bow. Last year, Japan was by far the largest customer for U.S. meat exports, buying more than $500 million worth of U.S. beef, a record. But even that is not enough to prevent entrepreneurs from installing airport meat counters.

Air Cargo

AIRPORT DUTY-FREE SHOPS FIND $18-A-POUND BEEF A GOOD SELLER

<div class="phx-topic abstract-wrapper">The carrier and ports group said revenue on all major trades, except its domestic network, fell in the first quarter, resulting in a 13% drop in revenue from container shipping. </div>

The carrier and ports group said revenue on all major trades, except its domestic network, fell in the first quarter, resulting in a 13% drop in revenue from container shipping.

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<div class="phx-topic">Cosco Shipping is redoubling efforts to expand into developing markets, including Latin America and Africa, in the face of a tougher economic and geopolitical environment, the container and ports group said. “Impacted by conflicts in the Middle East, the safety and stability of global shipping faced significant challenges,” the carrier said in a first-quarter earnings statement late Wednesday. “In the face of rapidly changing international political and economic conditions...(Cosco is)...making sustained efforts, particularly in the development of emerging markets, the establishment of a global digital supply chain product system, and digital and intelligent innovation,” it said. Cosco was commenting as it reported a 49% drop in first-quarter net profits to $861 million due to plunging freight rates, despite an increase in volumes. Total Q1 revenue fell 11% to $7.6 billion. “The group’s container shipping business experienced a year-on-year decrease in revenue per TEU and a year-on-year decrease in operating performance,” Cosco said, noting that the average China Export Containerized Freight Index (CCFI) fell 16.32% year over year in the first quarter. The carrier’s revenue per TEU on international routes fell 15% to $1,110 in the first quarter. Cosco said revenue on all its major trades except its domestic network fell in the first quarter, resulting in a 13% drop in revenue from container shipping, to $6.6 billion. That came despite a 6.7% increase in container volumes, to 6.9 million TEUs. The biggest drop in Cosco’s Q1 revenue was on trans-Pacific trades, which fell 23% to $1.8 billion even as liftings slipped just 1% to 1.2 million TEUs. Trans-Atlantic, Latin America and Africa trades saw a combined 22% revenue decline to $962 million, while liftings were 1.6% lower at 757,524 TEUs. Revenue from Asia–Europe services fell 10% to $1.4 billion in the first quarter despite a 14% increase in volumes to 1 million TEUs. Cosco’s ports subsidiary recorded a 2% rise in first quarter net profit to $86 million, while revenue was 10% higher at $421 million. Total container throughput at Cosco terminals climbed 9% year over year to 39 million TEUs. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Cosco Shipping is redoubling efforts to expand into developing markets, including Latin America and Africa, in the face of a tougher economic and geopolitical environment, the container and ports group said. “Impacted by conflicts in the Middle East, the safety and stability of global shipping faced significant challenges,” the carrier said in a first-quarter earnings statement late Wednesday. “In the face of rapidly changing international political and economic conditions...(Cosco is)...making sustained efforts, particularly in the development of emerging markets, the establishment of a global digital supply chain product system, and digital and intelligent innovation,” it said. Cosco was commenting as it reported a 49% drop in first-quarter net profits to $861 million due to plunging freight rates, despite an increase in volumes. Total Q1 revenue fell 11% to $7.6 billion. “The group’s container shipping business experienced a year-on-year decrease in revenue per TEU and a year-on-year decrease in operating performance,” Cosco said, noting that the average China Export Containerized Freight Index (CCFI) fell 16.32% year over year in the first quarter. The carrier’s revenue per TEU on international routes fell 15% to $1,110 in the first quarter. Cosco said revenue on all its major trades except its domestic network fell in the first quarter, resulting in a 13% drop in revenue from container shipping, to $6.6 billion. That came despite a 6.7% increase in container volumes, to 6.9 million TEUs. The biggest drop in Cosco’s Q1 revenue was on trans-Pacific trades, which fell 23% to $1.8 billion even as liftings slipped just 1% to 1.2 million TEUs. Trans-Atlantic, Latin America and Africa trades saw a combined 22% revenue decline to $962 million, while liftings were 1.6% lower at 757,524 TEUs. Revenue from Asia–Europe services fell 10% to $1.4 billion in the first quarter despite a 14% increase in volumes to 1 million TEUs. Cosco’s ports subsidiary recorded a 2% rise in first quarter net profit to $86 million, while revenue was 10% higher at $421 million. Total container throughput at Cosco terminals climbed 9% year over year to 39 million TEUs. Contact Keith Wallis at keithwallis@hotmail.com .

Container lines

Trans-Atlantic

Asia-Europe

Trans-Pacific

Container Shipping News

Maritime

Cosco doubles down on emerging trades as Q1 net profit plunges 49% 

<div class="phx-topic abstract-wrapper">The Cosco subsidiary said the 13,600-TEU ships have been ordered from Shanghai-based shipyard Hudong-Zhonghua Shipbuilding for delivery between 2028 and 2030.</div>

The Cosco subsidiary said the 13,600-TEU ships have been ordered from Shanghai-based shipyard Hudong-Zhonghua Shipbuilding for delivery between 2028 and 2030.

<div class="phx-topic">Hong Kong-based OOCL has ordered its first liquefied natural gas (LNG) vessels with a $2.2 billion deal for a dozen 13,600-TEU dual-fuel ships as part of a shift to more environmentally friendly vessels, the carrier said Thursday. The Cosco Shipping subsidiary said the ships have been ordered from Shanghai-based shipyard Hudong-Zhonghua Shipbuilding for delivery between 2028 and 2030. The choice of LNG and other green fuel technologies “is expected to reduce the need to purchase carbon credits,” OOCL said in a filing to the Hong Kong stock exchange. The size of the ships meant they “are versatile and suitable for deployment across a wide range of trade routes and terminals,” the carrier added. “...The vessels will enhance the group’s ability to serve diversified cargo demand.” OOCL’s order reinforces LNG as the next-generation fuel of choice for carriers renewing their fleets. LNG now accounts for around 83% of the dual-fuel container ships on order, or about 6.4 million TEUs in capacity terms, according to data on the Journal of Commerce’s Gateway platform. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ef78ab1f-3609-44d0-a713-fb260bc40609"></dynamic-object></div>OOCL said it invited quotes from at least three shipbuilders, but two declined to bid due to limited shipbuilding slot availability and resources. Hudong-Zhonghua’s price of $185 million per ship is comparable to the prevailing market price of new LNG dual-fuel powered container vessels of similar tonnage. The latest order takes OOCL’s backlog of new vessels to 18 ships after it signed agreements with Seaspan <a href="https://www.joc.com/article/volatile-shipping-market-drags-down-oocls-2025-financial-results-6185356">to charter six 13,000-TEU container vessels</a>. Those ships are expected to be delivered from the fourth quarter this year through the first quarter of 2028. The orders announced Thursday are the first that OOCL has placed for owned 13,000-TEU ships since 2013, the carrier said. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com.</a></div>

Hong Kong-based OOCL has ordered its first liquefied natural gas (LNG) vessels with a $2.2 billion deal for a dozen 13,600-TEU dual-fuel ships as part of a shift to more environmentally friendly vessels, the carrier said Thursday. The Cosco Shipping subsidiary said the ships have been ordered from Shanghai-based shipyard Hudong-Zhonghua Shipbuilding for delivery between 2028 and 2030. The choice of LNG and other green fuel technologies “is expected to reduce the need to purchase carbon credits,” OOCL said in a filing to the Hong Kong stock exchange. The size of the ships meant they “are versatile and suitable for deployment across a wide range of trade routes and terminals,” the carrier added. “...The vessels will enhance the group’s ability to serve diversified cargo demand.” OOCL’s order reinforces LNG as the next-generation fuel of choice for carriers renewing their fleets. LNG now accounts for around 83% of the dual-fuel container ships on order, or about 6.4 million TEUs in capacity terms, according to data on the Journal of Commerce’s Gateway platform. OOCL said it invited quotes from at least three shipbuilders, but two declined to bid due to limited shipbuilding slot availability and resources. Hudong-Zhonghua’s price of $185 million per ship is comparable to the prevailing market price of new LNG dual-fuel powered container vessels of similar tonnage. The latest order takes OOCL’s backlog of new vessels to 18 ships after it signed agreements with Seaspan to charter six 13,000-TEU container vessels . Those ships are expected to be delivered from the fourth quarter this year through the first quarter of 2028. The orders announced Thursday are the first that OOCL has placed for owned 13,000-TEU ships since 2013, the carrier said. Contact Keith Wallis at keithwallis@hotmail.com.

OOCL orders its first LNG-fueled ships with $2 billion deal for 12 vessels

<div class="phx-topic abstract-wrapper">While acknowledging a “volatile geopolitical landscape,” the carrier nonetheless says its forecast for the year assumes “operational conditions will stabilize to pre-conflict levels by summer.”</div>

While acknowledging a “volatile geopolitical landscape,” the carrier nonetheless says its forecast for the year assumes “operational conditions will stabilize to pre-conflict levels by summer.”

<div class="phx-topic">Ocean Network Express (ONE) is forecasting an 11% drop in net profit for the coming year, to $300 million, due to the impact of the war in the Middle East, carrier said Thursday after unveiling results for its 2025 fiscal year. The carrier said it expects to report a $50 million net loss for the first half of its fiscal year between April and October, followed by a $350 million net profit for its fiscal second half that ends in March 2027. ”The FY2026 forecast reflects the continued impact of the Middle East conflict and assumes that operational conditions will stabilize to pre-conflict levels by summer,” the carrier said in its earnings statement. ONE, however, cautioned that “forecasting for FY2026 remains challenging due to the volatile geopolitical landscape, particularly in the Middle East.” The Iran war also meant “the prospect of resuming passage through the Red Sea–Suez Canal route has become even more uncertain, and vessels continue to reroute via the Cape of Good Hope,” it added. <h3>Declines in net profit, revenue </h3>The cautionary outlook came as ONE reported net profit of $338 million for its fiscal year ended March 31. While that was down 92% from the $4.2 billion recorded for fiscal 2024, it was higher than the $310 million ONE forecast last November. Revenue was down 14% to $16.6 billion due to lower freight rates for much of the fiscal year, while liftings were 1% higher at 12.9 million TEUs. The second half of ONE’s fiscal year was buoyed by a rebound in freight rates between January and March and increased demand on the Asia-Europe trade ahead of the Lunar New Year that resulted in a fourth-quarter profit of $55 million. The healthy Asia-Europe demand helped offset a weaker-than-expected pre-Lunar New Year cargo rush on the eastbound trans-Pacific. "Despite heightened volatility in the fourth quarter of FY2025, our disciplined cost control and operational efficiency enabled us to deliver a profitable full-year result,” ONE CEO Jeremy Nixon said in the earnings statement. “We continue to navigate a complex and volatile global environment as we enter the new fiscal year, and the safety of our people as well as the security of our operations and customers’ cargo remain our top priorities.” Nixon <a href="https://www.joc.com/article/jeremy-nixon-to-step-down-as-one-ceo-after-eight-years-at-the-helm-6175802">will step down from the CEO role on July 1</a>after more than eight years at the helm, and be replaced by Till Ole Barrelet from Emirates Shipping Line. Nixon will remain with ONE as senior advisor. <a href="mailto:keithwallis@hotmail.com">Contact Keith Wallis at keithwallis@hotmail.com.</a></div>

Ocean Network Express (ONE) is forecasting an 11% drop in net profit for the coming year, to $300 million, due to the impact of the war in the Middle East, carrier said Thursday after unveiling results for its 2025 fiscal year. The carrier said it expects to report a $50 million net loss for the first half of its fiscal year between April and October, followed by a $350 million net profit for its fiscal second half that ends in March 2027. ”The FY2026 forecast reflects the continued impact of the Middle East conflict and assumes that operational conditions will stabilize to pre-conflict levels by summer,” the carrier said in its earnings statement. ONE, however, cautioned that “forecasting for FY2026 remains challenging due to the volatile geopolitical landscape, particularly in the Middle East.” The Iran war also meant “the prospect of resuming passage through the Red Sea–Suez Canal route has become even more uncertain, and vessels continue to reroute via the Cape of Good Hope,” it added. Declines in net profit, revenue The cautionary outlook came as ONE reported net profit of $338 million for its fiscal year ended March 31. While that was down 92% from the $4.2 billion recorded for fiscal 2024, it was higher than the $310 million ONE forecast last November. Revenue was down 14% to $16.6 billion due to lower freight rates for much of the fiscal year, while liftings were 1% higher at 12.9 million TEUs. The second half of ONE’s fiscal year was buoyed by a rebound in freight rates between January and March and increased demand on the Asia-Europe trade ahead of the Lunar New Year that resulted in a fourth-quarter profit of $55 million. The healthy Asia-Europe demand helped offset a weaker-than-expected pre-Lunar New Year cargo rush on the eastbound trans-Pacific. "Despite heightened volatility in the fourth quarter of FY2025, our disciplined cost control and operational efficiency enabled us to deliver a profitable full-year result,” ONE CEO Jeremy Nixon said in the earnings statement. “We continue to navigate a complex and volatile global environment as we enter the new fiscal year, and the safety of our people as well as the security of our operations and customers’ cargo remain our top priorities.” Nixon will step down from the CEO role on July 1 after more than eight years at the helm, and be replaced by Till Ole Barrelet from Emirates Shipping Line. Nixon will remain with ONE as senior advisor. Contact Keith Wallis at keithwallis@hotmail.com.

ONE expects 11% decline in FY26 net profit due to war in Middle East

<div class="phx-topic abstract-wrapper">Mid-size importers are generally satisfied with the base rates contained in their 2026-27 service contracts, but many are at the mercy of ocean carriers as to how emergency fuel surcharges are being handled.</div>

Mid-size importers are generally satisfied with the base rates contained in their 2026-27 service contracts, but many are at the mercy of ocean carriers as to how emergency fuel surcharges are being handled.

<div class="phx-topic">Mid-size US retailers and direct importers of Asia-sourced goods are finalizing 2026-27 service contracts with ocean carriers at base rates roughly comparable to last year — but with hundreds of dollars of additional bunker fuel surcharges baked in amid the war-driven jump in global oil prices. Container lines, despite facing a year of flat or negative volume growth and mounting global overcapacity, have generally been able to hold the line on trans-Pacific base rates while negotiating with cargo owners over how the higher fuel prices will be billed. Mid-size importers — those moving roughly 20,000 to 100,000 TEUs annually — have secured contracts in the range of $1,650 to $1,950 per FEU to the West Coast, with East Coast business about $1,000 per FEU higher, according to multiple industry sources. Those levels are comparable to the base rates in the expiring 2025-26 service contracts. However, with crude oil trading over $100 per barrel <a href="https://www.joc.com/article/hapag-lloyd-imposes-emergency-fuel-surcharges-on-third-party-feeder-cargo-6207629">due to the war in the Middle East</a> and closure of the Strait of Hormuz, carriers are approaching customers in the final stages of their 2026-27 service contract negotiations with bunker surcharges of as much as $400 per FEU, which would push the all-in freight rates to the US West Coast above $2,000 per FEU. That’s noticeably higher than last year when bunker fuel prices were stable. Most annual service contracts begin May 1 and run through April 30 of the following year. The Journal of Commerce spoke to seven ocean carriers, five forwarders, and three industry consultants for this story. “A lot of time customers push back on the surcharges, but the market is going to dictate what they are,” one carrier executive said. “Perhaps some carriers are more rigid than others as to how they apply additional surcharges, but I think that’s a matter of discussion.” Direct importers and forwarders are objecting to what they say are unilateral decisions by some carriers to change the standard bunker adjustment factor (BAF) in service contracts from a quarterly review to a monthly reset. Customers are also challenging carriers that are charging <a href="https://www.joc.com/article/carriers-handling-of-fuel-surcharges-agitates-small-midsize-trans-pac-shippers-6208047">emergency bunker surcharges (EBSs) that do not contain a clause</a> that would shift the EBS lower as oil prices drop. A second carrier executive said that given the current uncertainties due to the war in the Middle East, customers are asking shipping lines to offer guarantees and specify timelines around the bunker surcharges that are impossible to give. “If you ask a shipping line today, ‘Can you put an expiration date on the EBS, they cannot,’” the source said. A third carrier executive noted that fuel surcharges will vary noticeably based on the size of the customer and also the business relationship each carrier has with its customers. A large customer with a history of meeting the minimum quantity commitments (MQCs) in its annual contracts may be able to limit its fuel surcharge to as little as $100 per container, whereas smaller customers who have not booked frequently with the carrier may be offered a take-it-or-leave-it EBS of $400 per container, the carrier source explained. An industry consultant who has negotiated service contracts for big-box retailers said in order to finalize their negotiations, mid-size retailers and importers should shift their focus to fuel surcharges. “The key for shippers is don’t focus on just the base rate,” the consultant said. “Also understand what the floating bunker (charge) looks like and the emergency bunker surcharge, which at some point will go away.” The source added it is a fact that carriers are getting hit hard right now by higher fuel costs, with bunker fuel prices at major hubs, especially in Asia, essentially doubling after the war began. “It has to be passed down,” the source said. “They can’t just absorb those kinds of costs.” Carriers are including BAFs and emergency bunker surcharges in their service contract negotiations not only because they are being hit with higher bunker costs, but also because they are paying railroads and truckers more due to increased costs in those sectors, said Jason Cook, CEO of the forwarder Ardent Global Logistics. “They’re definitely standing firm on fuel surcharges,” Cook said of ocean carriers. “All costs are going up.” <h3>Contract extensions not a big issue </h3>In mid-April, two weeks before the May 1 start date of 2026-27 contracts, BCOs expressed concern that, facing a backlog of unsigned contracts, carriers would not be able to finalize all of the outstanding deals on time. Customers feared they would have no choice but to pay much higher spot rates until their new contracts were finalized. Spot rates from Asia to the US West Coast as of Wednesday were $2,767 per FEU to the West Coast and $3,767 to the East Coast, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Drewry pegged spot rates as of April 23 at $2,934 per FEU to the West Coast and $3,562 per FEU to the East Coast. In the case of both indexes, West Coast spot/freight-all-kinds rates have been above $2,000 per FEU for all of April. In their expiring 2025-26 service contracts, mid-size BCOs are paying in the range of $1,700 to $1,850 per FEU to the West Coast, so shipping under spot rates would add hundreds of dollars per container to the all-in rate. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="7f641553-97ec-4014-8e54-fef6408538d9"></dynamic-object></div>But most carriers this week are agreeing to give their customers an extension of their 2025-26 service contracts until mid- to late-May while new deals are finalized, sources say, thus sparing customers from the more expensive spot market. “They’re extending the contracts now,” Jon Monroe, who serves as an adviser to forwarders, said of ocean carriers. Bob Fredman, an industry consultant who for many years managed logistics for national retailers, said he encountered similar situations in years when there was a backlog of contracts waiting to be processed. The delays were often needed to wrap up the language in new contracts that went down to the wire. “I don’t think it’s something that’s going to be a deal-breaker for anyone,” Fredman said. <h3>Carriers limiting fixed-account bookings for NVOs </h3>As is customary, carriers have waited until the final week or so before the May 1 deadline to finalize contracts with most of the non-vessel-operating common carriers (NVOs) that book with them. That is once again the case this year, forwarders say. Some carriers are being especially restrictive as to how many containers their NVO customers can ship under their named account (NAC) rates, several forwarders said. NAC rates are fixed for the duration of the contract. Many carriers right now are requiring that NVOs book as many as four containers under higher FAK rates for each fixed-account booking. Named account rates are likely to settle in below $2,000 per FEU to the West Coast, so that means forwarders will be shipping about 80% of their containers under the higher FAK rates, the forwarders said. However, requiring that ratio is not a new strategy, especially when FAK rates are noticeably higher than the fixed rates at the time the contracts are being signed, one forwarder said. “We don’t see this as being any more prevalent than in the past,” said the source. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.Mark Szakonyi contributed to this report.</div>

Mid-size US retailers and direct importers of Asia-sourced goods are finalizing 2026-27 service contracts with ocean carriers at base rates roughly comparable to last year — but with hundreds of dollars of additional bunker fuel surcharges baked in amid the war-driven jump in global oil prices. Container lines, despite facing a year of flat or negative volume growth and mounting global overcapacity, have generally been able to hold the line on trans-Pacific base rates while negotiating with cargo owners over how the higher fuel prices will be billed. Mid-size importers — those moving roughly 20,000 to 100,000 TEUs annually — have secured contracts in the range of $1,650 to $1,950 per FEU to the West Coast, with East Coast business about $1,000 per FEU higher, according to multiple industry sources. Those levels are comparable to the base rates in the expiring 2025-26 service contracts. However, with crude oil trading over $100 per barrel due to the war in the Middle East and closure of the Strait of Hormuz, carriers are approaching customers in the final stages of their 2026-27 service contract negotiations with bunker surcharges of as much as $400 per FEU, which would push the all-in freight rates to the US West Coast above $2,000 per FEU. That’s noticeably higher than last year when bunker fuel prices were stable. Most annual service contracts begin May 1 and run through April 30 of the following year. The Journal of Commerce spoke to seven ocean carriers, five forwarders, and three industry consultants for this story. “A lot of time customers push back on the surcharges, but the market is going to dictate what they are,” one carrier executive said. “Perhaps some carriers are more rigid than others as to how they apply additional surcharges, but I think that’s a matter of discussion.” Direct importers and forwarders are objecting to what they say are unilateral decisions by some carriers to change the standard bunker adjustment factor (BAF) in service contracts from a quarterly review to a monthly reset. Customers are also challenging carriers that are charging emergency bunker surcharges (EBSs) that do not contain a clause that would shift the EBS lower as oil prices drop. A second carrier executive said that given the current uncertainties due to the war in the Middle East, customers are asking shipping lines to offer guarantees and specify timelines around the bunker surcharges that are impossible to give. “If you ask a shipping line today, ‘Can you put an expiration date on the EBS, they cannot,’” the source said. A third carrier executive noted that fuel surcharges will vary noticeably based on the size of the customer and also the business relationship each carrier has with its customers. A large customer with a history of meeting the minimum quantity commitments (MQCs) in its annual contracts may be able to limit its fuel surcharge to as little as $100 per container, whereas smaller customers who have not booked frequently with the carrier may be offered a take-it-or-leave-it EBS of $400 per container, the carrier source explained. An industry consultant who has negotiated service contracts for big-box retailers said in order to finalize their negotiations, mid-size retailers and importers should shift their focus to fuel surcharges. “The key for shippers is don’t focus on just the base rate,” the consultant said. “Also understand what the floating bunker (charge) looks like and the emergency bunker surcharge, which at some point will go away.” The source added it is a fact that carriers are getting hit hard right now by higher fuel costs, with bunker fuel prices at major hubs, especially in Asia, essentially doubling after the war began. “It has to be passed down,” the source said. “They can’t just absorb those kinds of costs.” Carriers are including BAFs and emergency bunker surcharges in their service contract negotiations not only because they are being hit with higher bunker costs, but also because they are paying railroads and truckers more due to increased costs in those sectors, said Jason Cook, CEO of the forwarder Ardent Global Logistics. “They’re definitely standing firm on fuel surcharges,” Cook said of ocean carriers. “All costs are going up.” Contract extensions not a big issue In mid-April, two weeks before the May 1 start date of 2026-27 contracts, BCOs expressed concern that, facing a backlog of unsigned contracts, carriers would not be able to finalize all of the outstanding deals on time. Customers feared they would have no choice but to pay much higher spot rates until their new contracts were finalized. Spot rates from Asia to the US West Coast as of Wednesday were $2,767 per FEU to the West Coast and $3,767 to the East Coast, according to Platts, a sister company of the Journal of Commerce within S&P Global. Drewry pegged spot rates as of April 23 at $2,934 per FEU to the West Coast and $3,562 per FEU to the East Coast. In the case of both indexes, West Coast spot/freight-all-kinds rates have been above $2,000 per FEU for all of April. In their expiring 2025-26 service contracts, mid-size BCOs are paying in the range of $1,700 to $1,850 per FEU to the West Coast, so shipping under spot rates would add hundreds of dollars per container to the all-in rate. But most carriers this week are agreeing to give their customers an extension of their 2025-26 service contracts until mid- to late-May while new deals are finalized, sources say, thus sparing customers from the more expensive spot market. “They’re extending the contracts now,” Jon Monroe, who serves as an adviser to forwarders, said of ocean carriers. Bob Fredman, an industry consultant who for many years managed logistics for national retailers, said he encountered similar situations in years when there was a backlog of contracts waiting to be processed. The delays were often needed to wrap up the language in new contracts that went down to the wire. “I don’t think it’s something that’s going to be a deal-breaker for anyone,” Fredman said. Carriers limiting fixed-account bookings for NVOs As is customary, carriers have waited until the final week or so before the May 1 deadline to finalize contracts with most of the non-vessel-operating common carriers (NVOs) that book with them. That is once again the case this year, forwarders say. Some carriers are being especially restrictive as to how many containers their NVO customers can ship under their named account (NAC) rates, several forwarders said. NAC rates are fixed for the duration of the contract. Many carriers right now are requiring that NVOs book as many as four containers under higher FAK rates for each fixed-account booking. Named account rates are likely to settle in below $2,000 per FEU to the West Coast, so that means forwarders will be shipping about 80% of their containers under the higher FAK rates, the forwarders said. However, requiring that ratio is not a new strategy, especially when FAK rates are noticeably higher than the fixed rates at the time the contracts are being signed, one forwarder said. “We don’t see this as being any more prevalent than in the past,” said the source. Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com . Mark Szakonyi contributed to this report.

Forwarding

Fuel charges complicate rush to ink new trans-Pacific service contracts

<div class="phx-topic abstract-wrapper">The terminal, jointly owned by Ports America and MSC’s Terminal Investment Limited, unveiled new container handling equipment as part of a growth drive to increase capacity by 40%.</div>

The terminal, jointly owned by Ports America and MSC’s Terminal Investment Limited, unveiled new container handling equipment as part of a growth drive to increase capacity by 40%.

<div class="phx-topic">Newark — The Port of New York and New Jersey’s third-busiest marine terminal on Wednesday unveiled $100 million in new container handling equipment and related facilities, the first step in a $1 billion plan to add a new berth and more rail capacity for its main customer, Mediterranean Shipping Co. Port Newark Container Terminal (PNCT) held a ribbon-cutting ceremony at a new maintenance shop designed for the terminal’s new, larger straddle carriers, which can span four-high container stacks. Along with the new shop, PNCT took delivery of the first 15 of the straddle carriers, with another 20 set for delivery by early 2027. The new yard equipment and shop are the first phase of PNCT’s plan to increase container volumes by 40% over the next three years, its Chief Executive Jim Pellicio told the Journal of Commerce. PNCT, jointly owned by Ports America and MSC’s Terminal Investment Limited (TiL), eventually plans to replace its entire fleet with 150 of the new straddle carriers, effectively increasing yard capacity by nearly a third through higher stacks. The new fleet will also be entirely diesel-electric hybrid as PNCT switches an increasing amount of its energy use to renewables. Over the past decade, PNCT has installed a solar array over its truck lanes and parking lot that takes up the equivalent of 12 acres of land, Pellicio said, generating half of the terminal’s energy. “This $100 million is a down payment on where PNCT has to go next,” Pellicio said. “The maintenance facility is built to support a much larger terminal than what we have today.” PNCT’s last upgrade cycle started in 2014, with a <a href="https://www.joc.com/article/upgrade-boosts-nynjs-pnct-terminal-capacity-5224445">$600 million investment</a> that included adding about 17 acres of terminal space, strengthening its three berths for larger ships, and <a href="https://www.joc.com/article/new-cranes-put-ny-nj-port-on-track-to-handle-more-ultra-large-ships-by-2025-5226275">adding two ultra-large ship cranes</a>. By 2020, that project had increased PNCT’s nominal capacity to about 2 million TEUs, up from 1.4 million TEUs. The next investment cycle will bring PNCT’s capacity to about 2.8 million TEUs, Pellicio said, adding that the terminal could add another 150 longshore jobs by 2029 due to the expansion. A big part of that upgrade will be an additional 68 acres on the terminal’s eastern end. The new space will come from <a href="https://www.joc.com/article/newark-port-project-to-give-mscs-terminal-more-room-to-grow-5703152">the Port Authority of New York and New Jersey’s $198 million rehabilitation</a> of a general cargo berth on the Newark peninsula’s southeastern end, along with the relocation of other port tenant properties to make way for container operations. The rehabilitation of Newark’s southeastern portion will provide PNCT another 400 feet of berth space on its eastern end by 2028. PNCT is also renovating another 700 feet of berth space on its western end, which will turn it into a four-berth facility. Pellicio said the additional space would allow PNCT to handle two 18,000-TEU ships simultaneously, along with a 9,000-TEU ship. Currently, its three berths can handle two 9,000-TEU ships and one 18,000-TEU ship. Although ships of that size will also require further dredging of the NY-NJ port to a 55-foot depth, Pellicio said it’s important to have PNCT ready for that next step. “There are no ships that need a 55-foot depth today, but you better build it today because they won’t come otherwise,” he said. <h3>Will add on-dock rail yard </h3>Along with the new equipment and berth, PNCT plans to add an on-dock rail yard at its eastern end, which should allow containers to move more easily to railcars. PNCT currently relies on yard hostlers to ferry containers over a flyover bridge to its rail yard adjacent to the New Jersey Turnpike. PNCT already leads the port in terms of inland cargo moves, with about 24% of its containers moving out on rail compared with a port-wide average of about 15%. Pellicio said the terminal needs more intermodal capacity because “MSC has a significant amount of rail containers.” “The shipping company might say ‘just take my New York boxes and leave the rail boxes for Savannah or Baltimore,’” Pellicio said. “I’m saying to them with this investment, take all the boxes off at PNCT. We will have the berths to do it and the rail to do it.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Newark — The Port of New York and New Jersey’s third-busiest marine terminal on Wednesday unveiled $100 million in new container handling equipment and related facilities, the first step in a $1 billion plan to add a new berth and more rail capacity for its main customer, Mediterranean Shipping Co. Port Newark Container Terminal (PNCT) held a ribbon-cutting ceremony at a new maintenance shop designed for the terminal’s new, larger straddle carriers, which can span four-high container stacks. Along with the new shop, PNCT took delivery of the first 15 of the straddle carriers, with another 20 set for delivery by early 2027. The new yard equipment and shop are the first phase of PNCT’s plan to increase container volumes by 40% over the next three years, its Chief Executive Jim Pellicio told the Journal of Commerce. PNCT, jointly owned by Ports America and MSC’s Terminal Investment Limited (TiL), eventually plans to replace its entire fleet with 150 of the new straddle carriers, effectively increasing yard capacity by nearly a third through higher stacks. The new fleet will also be entirely diesel-electric hybrid as PNCT switches an increasing amount of its energy use to renewables. Over the past decade, PNCT has installed a solar array over its truck lanes and parking lot that takes up the equivalent of 12 acres of land, Pellicio said, generating half of the terminal’s energy. “This $100 million is a down payment on where PNCT has to go next,” Pellicio said. “The maintenance facility is built to support a much larger terminal than what we have today.” PNCT’s last upgrade cycle started in 2014, with a $600 million investment that included adding about 17 acres of terminal space, strengthening its three berths for larger ships, and adding two ultra-large ship cranes . By 2020, that project had increased PNCT’s nominal capacity to about 2 million TEUs, up from 1.4 million TEUs. The next investment cycle will bring PNCT’s capacity to about 2.8 million TEUs, Pellicio said, adding that the terminal could add another 150 longshore jobs by 2029 due to the expansion. A big part of that upgrade will be an additional 68 acres on the terminal’s eastern end. The new space will come from the Port Authority of New York and New Jersey’s $198 million rehabilitation of a general cargo berth on the Newark peninsula’s southeastern end, along with the relocation of other port tenant properties to make way for container operations. The rehabilitation of Newark’s southeastern portion will provide PNCT another 400 feet of berth space on its eastern end by 2028. PNCT is also renovating another 700 feet of berth space on its western end, which will turn it into a four-berth facility. Pellicio said the additional space would allow PNCT to handle two 18,000-TEU ships simultaneously, along with a 9,000-TEU ship. Currently, its three berths can handle two 9,000-TEU ships and one 18,000-TEU ship. Although ships of that size will also require further dredging of the NY-NJ port to a 55-foot depth, Pellicio said it’s important to have PNCT ready for that next step. “There are no ships that need a 55-foot depth today, but you better build it today because they won’t come otherwise,” he said. Will add on-dock rail yard Along with the new equipment and berth, PNCT plans to add an on-dock rail yard at its eastern end, which should allow containers to move more easily to railcars. PNCT currently relies on yard hostlers to ferry containers over a flyover bridge to its rail yard adjacent to the New Jersey Turnpike. PNCT already leads the port in terms of inland cargo moves, with about 24% of its containers moving out on rail compared with a port-wide average of about 15%. Pellicio said the terminal needs more intermodal capacity because “MSC has a significant amount of rail containers.” “The shipping company might say ‘just take my New York boxes and leave the rail boxes for Savannah or Baltimore,’” Pellicio said. “I’m saying to them with this investment, take all the boxes off at PNCT. We will have the berths to do it and the rail to do it.” Contact Michael Angell at michael.angell@spglobal.com .

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