<div class="phx-topic abstract-wrapper">Global air cargo grew 4.5 percent in January from a year ago, extending the turnaround in the market that began in late 2012, the International Air Transport Association said.</div>

Global air cargo grew 4.5 percent in January from a year ago, extending the turnaround in the market that began in late 2012, the International Air Transport Association said.

<div>Global air cargo grew 4.5 percent in January from a year ago, extending the turnaround in the market that began in late 2012, the International Air Transport Association said.IATA cautioned, however, that the increase was from an exceptionally low base caused by the timing of the Chinese New Year when many export-oriented Asian factories close. The weeklong holiday, which took place in February this year, occurred in January 2012, which skewed the year-over-year comparison with January 2013.January traffic fell 0.9 percent from December, while capacity grew 2.1 percent from a year ago; the global load factor stood at 41.9 percent.Despite...

Global air cargo grew 4.5 percent in January from a year ago, extending the turnaround in the market that began in late 2012, the International Air Transport Association said. IATA cautioned, however, that the increase was from an exceptionally low base caused by the timing of the Chinese New Year when many export-oriented Asian factories close. The weeklong holiday, which took place in February this year, occurred in January 2012, which skewed the year-over-year comparison with January 2013. January traffic fell 0.9 percent from December, while capacity grew 2.1 percent from a year ago; the global load factor stood at 41.9 percent. Despite the caveats, IATA said the market is showing signs of stabilizing after shrinking 1.5 percent in 2012. “The air freight business is showing some encouraging signs. But it’s too early to be overly optimistic,” said Tony Tyler, IATA’s chief executive. While the market has bottomed out, overall volumes are still below the levels of 2010 and 2011, he said. “Load factors are low. And the global economy is fragile. Our forecast remains for modest growth demand of 1.4 percent. But with weak load factors, yields are going to be under severe downward pressure.” Asia-Pacific carriers, which have a market share of nearly 40 percent, booked year-over-year growth of 7.1 percent in January with 0.4 percent less capacity. Adjusting for the effect of the Chinese New Year, they saw demand growth of around 3 percent. The region’s airlines have accounted for about 60 percent of the market growth since October, driven by the pickup in the Chinese economy and stronger global demand for products from South Korea and Taiwan. North American airlines saw modest 0.6 percent growth in January, while capacity was trimmed by 1 percent. They have contributed 15 percent of the global increase in demand since October as U.S. consumers become more positive about their economic prospects. European carriers boosted traffic by 1.2 percent in January, half the 2.4 percent growth in capacity. The persistent economic weakness in the eurozone — a major market for air freight consumer goods — is dampening world trade growth and will limit growth in air cargo volumes in 2013, IATA said. The Middle East continued to outpace other regions, with its airlines boosting traffic by 15.3 percent over January 2012, ahead of a 12.4 percent increase in capacity. Latin American carriers were the only regional grouping to report lower traffic, down 1.6 percent on January 2012 on a 10.2 percent increase in capacity as airlines from outside the region enter the market.

Air Cargo Carriers News

Global Air Freight Grows on Strong Asia, Mideast Markets

<div class="phx-topic abstract-wrapper">The average price for a gallon of diesel fuel rose 96 cents for the week ended March 9, according to the Energy Information Administration, the biggest seven-day spike since the agency began releasing the data in 1994. </div>

The average price for a gallon of diesel fuel rose 96 cents for the week ended March 9, according to the Energy Information Administration, the biggest seven-day spike since the agency began releasing the data in 1994.

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<div class="phx-topic">The US trucking industry may be showing signs of coming out of a nearly four-year-long freight recession as spot rates have remained elevated, especially along the East Coast and in the Midwest, after the disruption caused by snow and ice storms in January and February. And now lending support to rates is the uncertainty tied to the war in the Middle East and the resulting surge in fuel prices. The average price for a gallon of diesel fuel rose 96 cents for the week ended March 9, according to the US Energy Information Administration. That’s the biggest seven-day spike since the agency began releasing data in 1994, topping the previous record of a 75-cent spike in March 2022 after Russia invaded Ukraine. Diesel now sits at nearly $4.90 per gallon nationally and more than $6/gal in California. For the shipper, it means the average fuel surcharge has risen between 15 and 20 cents per mile, causing rates on long hauls across the US to rise sharply. Shippers will notice when they receive invoices from brokers and carriers in the coming weeks. Trucking executives believe the bullish fundamentals will push contract rates higher as those deals are renegotiated. Indeed, the process has already begun, according to multiple shippers; sources have told the Journal of Commerce that brokers are refusing to handle loads on contracts signed as recently as Jan. 1 unless rates are renegotiated. “Tender rejections are up 13 to 15%,” said ITS Logistics Chief Commercial Officer Josh Allen. “That’s the first rejection. If shippers have done (requests for proposals), maybe as recently as 90 to 180 days ago, some of those contract rates are already underwater.” According to a Journal of Commerce analysis, shipper-paid spot rates nationally increased between 15% to 20% year over year in February. But rates are surging in pockets, rather than nationally. Rates between November and February jumped 52 cents per mile on loads originating in the Midwest, but only rose 10 cents for originations in the Southwest. <h3>’Signs of disruption’ </h3>Tightening capacity is the result of both slower economic conditions causing some carriers to go bankrupt, and by the Trump administration’s crackdown on non-domiciled drivers and push for English language proficiency rules. There is also the proposed Dalilah’s law, which would prohibit states from issuing commercial driver’s licenses to undocumented immigrants and retroactively cancel all existing licenses to those individuals. “For the first time in roughly three years, routing guides are showing signs of disruption,” said Nolan Transportation Group President and Chief Operating Officer Drew Herpich. “Many transportation RFPs that went live this year were priced in Q3 and Q4 of last year when market conditions were significantly more stable.” Herpich added that as tender rejection rates increase, more freight is going to the second, third, or fourth contract carriers in the shipper’s routing guide or directly posted on the spot market. He also said that carriers and brokers are “becoming more disciplined” around capacity commitments, and communication with customers is becoming clearer as the weekly volume approaches or exceeds the total outlined in the contract. “Conversations around contract alignment are occurring across the market,” Herpich said. “The most effective approach has been collaborative discussions with customers to address market shifts and ensure sustainable pricing that supports service reliability and execution.” Allen said the so-called “waterfall” is beginning as rates need to be adjusted. “I think it’s happening everywhere,” he said. “A shipper calls and says ‘you are 12th in line from a rating perspective in the routing guide. The 11 before you have declined, would you like these opportunities at these published rates?’” At the Raymond James Investor Conference last week, truckload carrier J.B. Hunt Transport Services said the tightening capacity shows similarities to last major regulatory crackdown in 2017. “We’ve really not had a supply market shrinkage since probably ‘17 or ‘18 with ELDs [electronic logging devices],” Nick Hobbs, J.B. Hunt’s president of highway services, said at the conference. “Probably the most talked about is non-domiciled drivers...We’re also seeing driver schools shut down [CDL mills] and we’re seeing a lot of enforcement around chameleon carriers.” The term CDL mills has been coined to describe low-quality truck driving schools that prioritize high-volume, rapid training over safety, which are increasingly getting shut down by the US government. Chameleon carriers refer to trucking companies who operate with multiple company names and registration numbers, swapping one placard for another on their trucks to evade law enforcement. Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>. </div>

The US trucking industry may be showing signs of coming out of a nearly four-year-long freight recession as spot rates have remained elevated, especially along the East Coast and in the Midwest, after the disruption caused by snow and ice storms in January and February. And now lending support to rates is the uncertainty tied to the war in the Middle East and the resulting surge in fuel prices. The average price for a gallon of diesel fuel rose 96 cents for the week ended March 9, according to the US Energy Information Administration. That’s the biggest seven-day spike since the agency began releasing data in 1994, topping the previous record of a 75-cent spike in March 2022 after Russia invaded Ukraine. Diesel now sits at nearly $4.90 per gallon nationally and more than $6/gal in California. For the shipper, it means the average fuel surcharge has risen between 15 and 20 cents per mile, causing rates on long hauls across the US to rise sharply. Shippers will notice when they receive invoices from brokers and carriers in the coming weeks. Trucking executives believe the bullish fundamentals will push contract rates higher as those deals are renegotiated. Indeed, the process has already begun, according to multiple shippers; sources have told the Journal of Commerce that brokers are refusing to handle loads on contracts signed as recently as Jan. 1 unless rates are renegotiated. “Tender rejections are up 13 to 15%,” said ITS Logistics Chief Commercial Officer Josh Allen. “That’s the first rejection. If shippers have done (requests for proposals), maybe as recently as 90 to 180 days ago, some of those contract rates are already underwater.” According to a Journal of Commerce analysis, shipper-paid spot rates nationally increased between 15% to 20% year over year in February. But rates are surging in pockets, rather than nationally. Rates between November and February jumped 52 cents per mile on loads originating in the Midwest, but only rose 10 cents for originations in the Southwest. ’Signs of disruption’ Tightening capacity is the result of both slower economic conditions causing some carriers to go bankrupt, and by the Trump administration’s crackdown on non-domiciled drivers and push for English language proficiency rules. There is also the proposed Dalilah’s law, which would prohibit states from issuing commercial driver’s licenses to undocumented immigrants and retroactively cancel all existing licenses to those individuals. “For the first time in roughly three years, routing guides are showing signs of disruption,” said Nolan Transportation Group President and Chief Operating Officer Drew Herpich. “Many transportation RFPs that went live this year were priced in Q3 and Q4 of last year when market conditions were significantly more stable.” Herpich added that as tender rejection rates increase, more freight is going to the second, third, or fourth contract carriers in the shipper’s routing guide or directly posted on the spot market. He also said that carriers and brokers are “becoming more disciplined” around capacity commitments, and communication with customers is becoming clearer as the weekly volume approaches or exceeds the total outlined in the contract. “Conversations around contract alignment are occurring across the market,” Herpich said. “The most effective approach has been collaborative discussions with customers to address market shifts and ensure sustainable pricing that supports service reliability and execution.” Allen said the so-called “waterfall” is beginning as rates need to be adjusted. “I think it’s happening everywhere,” he said. “A shipper calls and says ‘you are 12th in line from a rating perspective in the routing guide. The 11 before you have declined, would you like these opportunities at these published rates?’” At the Raymond James Investor Conference last week, truckload carrier J.B. Hunt Transport Services said the tightening capacity shows similarities to last major regulatory crackdown in 2017. “We’ve really not had a supply market shrinkage since probably ‘17 or ‘18 with ELDs [electronic logging devices],” Nick Hobbs, J.B. Hunt’s president of highway services, said at the conference. “Probably the most talked about is non-domiciled drivers...We’re also seeing driver schools shut down [CDL mills] and we’re seeing a lot of enforcement around chameleon carriers.” The term CDL mills has been coined to describe low-quality truck driving schools that prioritize high-volume, rapid training over safety, which are increasingly getting shut down by the US government. Chameleon carriers refer to trucking companies who operate with multiple company names and registration numbers, swapping one placard for another on their trucks to evade law enforcement. Contact Dan Ronan at contactdanronan@gmail.com .

Trucking News

Surface

Elevated US trucking rates get new boost from diesel gains amid Middle East war 

<div class="phx-topic abstract-wrapper">Nineteen MPVs are stuck in the Arabian Gulf, while bunker costs have increased by $3 to $7 per ton of cargo as a result of the Middle East war, according to one vessel operator. </div>

Nineteen MPVs are stuck in the Arabian Gulf, while bunker costs have increased by $3 to $7 per ton of cargo as a result of the Middle East war, according to one vessel operator.

<div class="phx-topic">There has so far been a muted impact on the multipurpose vessel (MPV) sector from the Middle East war, although vessel operators say there is the potential for higher freight rates if the conflict is prolonged. Arthur English, CEO of Norway-headquartered MPV operator G2 Ocean, said both spot and forward freight rates are “relatively stable.” “The ongoing conflict in the Middle East has so far had limited direct impact on our operations,” he told the Journal of Commerce Wednesday. English said G2 Ocean did have one ship that was partially loaded for discharge in the region, but it decided not to go ahead with the voyage following a risk assessment and discussions with the shipper. The cargo was unloaded outside of the high-risk area that covers the Strait of Hormuz, the Persian Gulf and surrounding waters near Saudi Arabia, Kuwait, Qatar and the United Arab Emirates. “Currently, we are not accepting new bookings into the high-risk area, in line with our risk management practices,” English said. <h3>‘Severe effects’ on bunker prices, supply </h3>His views were echoed by sector analysts, including Germany-based shipbroking house Toepfer Transport and maritime consultant Drewry. Toepfer’s latest monthly MPP index showed rates continue to be rangebound despite the conflict, fluctuating in a band between $12,000 and $13,000 a day over the past year. The March index figure is $12,750, Toepfer said in its most recent report published Monday. “It remains unclear what the current escalation of the situation in the Middle East will bring, with 19 [MPV] ships currently ‘locked in’ in the Arabian Gulf and quite some severe effects on bunker prices and supply,” the report said. Overall, the outlook for 2026 remains optimistic on both the carrier and shipper sides, although some stakeholders have begun to express concerns that the situation could change in 2027,” it added. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9e94cdf4-df57-437c-afda-809c33f45e0c"></dynamic-object></div> The most significant change has been to increase bunker fuel prices, operators and analysts said, who also warned of <a href="https://www.joc.com/article/maersk-forced-to-ship-fuel-from-us-europe-as-asia-bunkers-start-to-run-dry-6184651">possible fuel shortages going forward</a>. “Bunker prices have increased since the conflict escalated, driven by tighter availability and supply risk, particularly in Asia,” English said. “Depending on trade route, this has increased our bunker cost by approximately $3 to $7 per ton of cargo onboard, which is increasing the total cost for freight.” Marine fuel prices in Singapore, the world’s largest ship refueling hub, have more than doubled since the war started, according to a report on the conflict by the UN Council on Trade and Development. The study, published Tuesday, said prices for high and low sulfur fuel oil soared from between $400 and $450 per metric ton last month to $874 to $1,000/metric ton now. S&amp;P Global Energy, a sister company of the Journal of Commerce, on Wednesday assessed the price of 0.5% sulfur marine bunker fuel in Singapore at $1,050 per metric ton, up from $519/metric ton the day before the war began. Rising fuel prices and tighter supply are also expected to change “where we bunker our vessels as we adjust for availability and prices,” English said, adding freight rates could increase over time due to reduced bunker availability and longer voyages around high-risk areas if the war persists. <h3>Breakbulk volumes at risk </h3>Longer term, Drewry said the conflict could have a mixed impact on breakbulk cargo in the region. Breakbulk freight is a staple cargo for the MPV sector in the Middle East, with major export cargoes comprising petrochemicals, aluminum, steel, oil and gas equipment and fertilizers, according to Drewry senior research analyst Anurag Kumar. Imports include project cargo and heavy machinery, construction materials, and agricultural products. “Saudi Arabia, especially at Jubail, and the UAE, particularly at Jebel Ali port are major centers for project cargo and industrial shipments,” Kumar said in a commentary on the impact of the conflict. “When the conflict ends, rebuilding could lead to surge in the demand for project cargo, especially heavy machinery, oil and gas equipment, steel structures, power generation parts, and industrial materials,” he added. In the meantime, Kumar said the impact could be immense if the conflict lasts the four to five weeks predicted by US officials. It could cause “unprecedented freight volatility, taking insurance and fuel costs higher, and reducing the ability of delivering breakbulk cargoes to their destinations in the Gulf.” Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

There has so far been a muted impact on the multipurpose vessel (MPV) sector from the Middle East war, although vessel operators say there is the potential for higher freight rates if the conflict is prolonged. Arthur English, CEO of Norway-headquartered MPV operator G2 Ocean, said both spot and forward freight rates are “relatively stable.” “The ongoing conflict in the Middle East has so far had limited direct impact on our operations,” he told the Journal of Commerce Wednesday. English said G2 Ocean did have one ship that was partially loaded for discharge in the region, but it decided not to go ahead with the voyage following a risk assessment and discussions with the shipper. The cargo was unloaded outside of the high-risk area that covers the Strait of Hormuz, the Persian Gulf and surrounding waters near Saudi Arabia, Kuwait, Qatar and the United Arab Emirates. “Currently, we are not accepting new bookings into the high-risk area, in line with our risk management practices,” English said. ‘Severe effects’ on bunker prices, supply His views were echoed by sector analysts, including Germany-based shipbroking house Toepfer Transport and maritime consultant Drewry. Toepfer’s latest monthly MPP index showed rates continue to be rangebound despite the conflict, fluctuating in a band between $12,000 and $13,000 a day over the past year. The March index figure is $12,750, Toepfer said in its most recent report published Monday. “It remains unclear what the current escalation of the situation in the Middle East will bring, with 19 [MPV] ships currently ‘locked in’ in the Arabian Gulf and quite some severe effects on bunker prices and supply,” the report said. Overall, the outlook for 2026 remains optimistic on both the carrier and shipper sides, although some stakeholders have begun to express concerns that the situation could change in 2027,” it added.  The most significant change has been to increase bunker fuel prices, operators and analysts said, who also warned of possible fuel shortages going forward . “Bunker prices have increased since the conflict escalated, driven by tighter availability and supply risk, particularly in Asia,” English said. “Depending on trade route, this has increased our bunker cost by approximately $3 to $7 per ton of cargo onboard, which is increasing the total cost for freight.” Marine fuel prices in Singapore, the world’s largest ship refueling hub, have more than doubled since the war started, according to a report on the conflict by the UN Council on Trade and Development. The study, published Tuesday, said prices for high and low sulfur fuel oil soared from between $400 and $450 per metric ton last month to $874 to $1,000/metric ton now. S&P Global Energy, a sister company of the Journal of Commerce, on Wednesday assessed the price of 0.5% sulfur marine bunker fuel in Singapore at $1,050 per metric ton, up from $519/metric ton the day before the war began. Rising fuel prices and tighter supply are also expected to change “where we bunker our vessels as we adjust for availability and prices,” English said, adding freight rates could increase over time due to reduced bunker availability and longer voyages around high-risk areas if the war persists. Breakbulk volumes at risk Longer term, Drewry said the conflict could have a mixed impact on breakbulk cargo in the region. Breakbulk freight is a staple cargo for the MPV sector in the Middle East, with major export cargoes comprising petrochemicals, aluminum, steel, oil and gas equipment and fertilizers, according to Drewry senior research analyst Anurag Kumar. Imports include project cargo and heavy machinery, construction materials, and agricultural products. “Saudi Arabia, especially at Jubail, and the UAE, particularly at Jebel Ali port are major centers for project cargo and industrial shipments,” Kumar said in a commentary on the impact of the conflict. “When the conflict ends, rebuilding could lead to surge in the demand for project cargo, especially heavy machinery, oil and gas equipment, steel structures, power generation parts, and industrial materials,” he added. In the meantime, Kumar said the impact could be immense if the conflict lasts the four to five weeks predicted by US officials. It could cause “unprecedented freight volatility, taking insurance and fuel costs higher, and reducing the ability of delivering breakbulk cargoes to their destinations in the Gulf.” Contact Keith Wallis at keithwallis@hotmail.com .

Breakbulk carriers

Heavy-haul transport

Project cargo

Breakbulk News

Maritime

Muted short-term impact on MPVs from Iran conflict, but longer-term risks rising

<div class="phx-topic abstract-wrapper">With the flow of waterborne oil suspended in the Strait of Hormuz, reports out of China say suppliers are rationing fuel in anticipation of growing shortages, while bunkering centers such as Salalah in Oman are no longer able to fulfil orders. </div>

With the flow of waterborne oil suspended in the Strait of Hormuz, reports out of China say suppliers are rationing fuel in anticipation of growing shortages, while bunkering centers such as Salalah in Oman are no longer able to fulfil orders.

<div class="phx-topic">The disruption to oil exports through the Strait of Hormuz is forcing Maersk to take the unprecedented step of filling ships with fuel in the US and Europe and transferring the bunkers to vessels in Asia, the carrier’s chief commercial officer said Wednesday. Karsten Kildahl told the Journal of Commerce in an interview that in the past two days, several of Maersk’s bunker suppliers in key areas in the Middle East and Asia have been unable to refuel the carrier’s vessels. “We’ve had to start moving oil around ourselves because we don’t have enough supplies where we need them,” Kildahl said. “In Asia, nearly half of their supplies come from the Gulf area, so some of the vessels leaving the US and Europe are filled with as much oil as we possibly can, and then we transport the fuel to other vessels we connect with in Asia.” 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. More than 10 ships have been attacked since the war started, and soaring war risk insurance is keeping most commercial shipping out of the region, including oil tankers. With the flow of waterborne oil suspended, reports out of China say suppliers are rationing fuel in anticipation of growing shortages, while bunkering centers such as Salalah in Oman are no longer able to fulfil fuel orders, Kildahl said. “Salalah is one of our main bunker ports in the Gulf, but we’ve not been able to bunker there for the past two days, so we need to transfer bunkers from one place to another,” he said. “The main concern right now is how do we safeguard the supply of oil?” <h3>Tanker chartering not an option </h3>Chartering a tanker to transport oil to where it is needed was not an option, Kildahl said, with available vessels in short supply. “In the short term, we have started bunkering in less efficient locations with a higher cost and more difficult logistics behind it, and over time we will have to significantly beef this up if [the war drags on],” he warned. “That is where you will have the risk of a larger impact, much more than the 7% of world cargo flow that goes in and out of the Gulf.” Oil prices, meanwhile, have rocketed higher. S&amp;P Global Energy, a sister company of the Journal of Commerce, on Wednesday assessed the price of 0.5% sulfur marine bunker fuel in Singapore at $1,050 per metric ton, up from $519/metric ton the day before the war began. Carriers have responded by rolling out “emergency” surcharges. Maersk on Tuesday announced a global emergency bunker surcharge of $400 per FEU, joining Hapag-Lloyd, CMA CGM and Mediterranean Shipping Co. in implementing similar fuel surcharges. Kildahl said the ship-to-ship transfers, moving oil from the US and Europe to Asia, and changing fuel supply patterns was creating additional expenses for the carrier, on top of rising bunker prices. With the Persian Gulf out of bounds, congestion is growing at other ports in the region with carriers looking to discharge cargo that had already departed Asia when booking suspensions were announced on March 1. Most of the carriers are prioritizing urgent cargo, such as food and pharmaceuticals, but Kildahl said at some point “other cargo will become urgent,” such as aluminum and petrochemicals and polyethylene that are raw materials for plastics production. “Those products can’t float out right now realistically, and so is that a problem tomorrow? No, it’s not,” he said. “It’s not a problem next week either, but at some point, it will be.” <h3>‘End-of-voyage’ disruptions </h3>For general and non-urgent cargo, MSC, CMA CGM and Yang Ming are among the carriers that have declared “end-of-voyage” for Persian Gulf-bound containers already onboard vessels. That cargo status means the carriers are unable to fulfill obligations on a bill of lading, and when the containers are offloaded at a port, they become the responsibility of the cargo owner. Kildahl said Maersk has about 40,000 TEUs that are shipped in and out of the Persian Gulf every week, and that bookings have been suspended to avoid diverted volume collapsing terminals in the region. But instead of declaring end-of-voyage, Maersk has taken a different approach, offering shippers three options: Keeping the cargo in temporary storage, having it returned to the port of departure, or delivering it to another destination for onward transport by another mode. “We are using Salalah and Khor Fakkan for cargo that comes from the east and are securing trucking capacity to take it into the Gulf,” Kildahl said. “For cargo that comes from Europe, we focus mainly on Jeddah and are deploying trucks to take the cargo across the Arabian Peninsula through the desert. “We don’t think it is a fantastic solution for any customer to get an end-of-voyage declaration,” he added. “If the customer doesn’t want any of the options, we may be forced into an end-of-voyage declaration, but I doubt we will come to that.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The disruption to oil exports through the Strait of Hormuz is forcing Maersk to take the unprecedented step of filling ships with fuel in the US and Europe and transferring the bunkers to vessels in Asia, the carrier’s chief commercial officer said Wednesday. Karsten Kildahl told the Journal of Commerce in an interview that in the past two days, several of Maersk’s bunker suppliers in key areas in the Middle East and Asia have been unable to refuel the carrier’s vessels. “We’ve had to start moving oil around ourselves because we don’t have enough supplies where we need them,” Kildahl said. “In Asia, nearly half of their supplies come from the Gulf area, so some of the vessels leaving the US and Europe are filled with as much oil as we possibly can, and then we transport the fuel to other vessels we connect with in Asia.” 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. More than 10 ships have been attacked since the war started, and soaring war risk insurance is keeping most commercial shipping out of the region, including oil tankers. With the flow of waterborne oil suspended, reports out of China say suppliers are rationing fuel in anticipation of growing shortages, while bunkering centers such as Salalah in Oman are no longer able to fulfil fuel orders, Kildahl said. “Salalah is one of our main bunker ports in the Gulf, but we’ve not been able to bunker there for the past two days, so we need to transfer bunkers from one place to another,” he said. “The main concern right now is how do we safeguard the supply of oil?” Tanker chartering not an option Chartering a tanker to transport oil to where it is needed was not an option, Kildahl said, with available vessels in short supply. “In the short term, we have started bunkering in less efficient locations with a higher cost and more difficult logistics behind it, and over time we will have to significantly beef this up if [the war drags on],” he warned. “That is where you will have the risk of a larger impact, much more than the 7% of world cargo flow that goes in and out of the Gulf.” Oil prices, meanwhile, have rocketed higher. S&P Global Energy, a sister company of the Journal of Commerce, on Wednesday assessed the price of 0.5% sulfur marine bunker fuel in Singapore at $1,050 per metric ton, up from $519/metric ton the day before the war began. Carriers have responded by rolling out “emergency” surcharges. Maersk on Tuesday announced a global emergency bunker surcharge of $400 per FEU, joining Hapag-Lloyd, CMA CGM and Mediterranean Shipping Co. in implementing similar fuel surcharges. Kildahl said the ship-to-ship transfers, moving oil from the US and Europe to Asia, and changing fuel supply patterns was creating additional expenses for the carrier, on top of rising bunker prices. With the Persian Gulf out of bounds, congestion is growing at other ports in the region with carriers looking to discharge cargo that had already departed Asia when booking suspensions were announced on March 1. Most of the carriers are prioritizing urgent cargo, such as food and pharmaceuticals, but Kildahl said at some point “other cargo will become urgent,” such as aluminum and petrochemicals and polyethylene that are raw materials for plastics production. “Those products can’t float out right now realistically, and so is that a problem tomorrow? No, it’s not,” he said. “It’s not a problem next week either, but at some point, it will be.” ‘End-of-voyage’ disruptions For general and non-urgent cargo, MSC, CMA CGM and Yang Ming are among the carriers that have declared “end-of-voyage” for Persian Gulf-bound containers already onboard vessels. That cargo status means the carriers are unable to fulfill obligations on a bill of lading, and when the containers are offloaded at a port, they become the responsibility of the cargo owner. Kildahl said Maersk has about 40,000 TEUs that are shipped in and out of the Persian Gulf every week, and that bookings have been suspended to avoid diverted volume collapsing terminals in the region. But instead of declaring end-of-voyage, Maersk has taken a different approach, offering shippers three options: Keeping the cargo in temporary storage, having it returned to the port of departure, or delivering it to another destination for onward transport by another mode. “We are using Salalah and Khor Fakkan for cargo that comes from the east and are securing trucking capacity to take it into the Gulf,” Kildahl said. “For cargo that comes from Europe, we focus mainly on Jeddah and are deploying trucks to take the cargo across the Arabian Peninsula through the desert. “We don’t think it is a fantastic solution for any customer to get an end-of-voyage declaration,” he added. “If the customer doesn’t want any of the options, we may be forced into an end-of-voyage declaration, but I doubt we will come to that.” Contact Greg Knowler at greg.knowler@spglobal.com .

Container lines

Container Shipping News

Maersk forced to ship fuel from US, Europe as Asia bunkers start to run dry

<div class="phx-topic abstract-wrapper">CEO Jeremy Nixon said the investment, which could be valued at close to $1 billion, is part of ONE’s plan to reach 3 million TEUs in capacity by 2030. </div>

CEO Jeremy Nixon said the investment, which could be valued at close to $1 billion, is part of ONE’s plan to reach 3 million TEUs in capacity by 2030.

<div class="phx-topic">Ocean Network Express (ONE) has increased its ownership stake in its largest provider of chartered tonnage, becoming the largest external shareholder of Poseidon Corp. in a transaction potentially valued at close to $1 billion. ONE said in a statement Tuesday it signed an agreement to acquire an additional stake in Poseidon, the parent company of Singapore-based container shipowner Seaspan, from existing shareholders. ONE said the purchase brings its stake in Poseidon to 48.9%. ONE did not say how much it paid for the additional stake. But Canadian insurance company Fairfax Financial said separately Tuesday that it sold about half of its stake in Poseidon for $1.91 billion, with half of that stake going to an existing Poseidon shareholder who will increase their ownership stake. The other half of Fairfax’s stake was sold to unidentified strategic investors. ONE CEO Jeremy Nixon said in the statement that the investment in Poseidon is part of the carrier’s growth strategy through 2030. ONE currently has a fleet of 281 ships amounting to 2.2 million TEUs. Of that, Seaspan has chartered some 43 container ships to ONE, amounting to about 417,000 TEUs in capacity. “Since our initial investment in 2023, Seaspan has achieved remarkable growth as the world’s leading tonnage platform,” Nixon said. “We are pleased to acquire this additional stake in Poseidon, which fully aligns with our ONE 2030 strategic growth plan.” <a href="https://www.joc.com/article/strategic-investment-underpins-ones-sustainable-profitability-target-nixon-5241768">Poseidon took a nearly one-third ownership stake in Seaspan in 2023 for $1.4 billion</a>. The group included Fairfax, investor David Sokol, and the Washington family, which originally owned Seaspan. Sokol and the Washington family pooled their existing shares to take Seaspan private that year. <h3>Tight supply-demand balance </h3>Speaking at the Journal of Commerce’s TPM26 conference in Long Beach last week, Nixon said it’s important for ONE to continue investing in new vessels because the global supply and demand balance remains tight. ONE’s 2030 strategy includes reaching 3 million TEU in carrier capacity. The trans-Pacific market is only expected to see slight growth this year, Nixon said. But north-south trade and intra-regional trades are growing at double-digit rates, keeping further pressure on ship supply. “The charter market is so tight. There are really no ships available,” Nixon said at TPM26. “Carriers have to be thinking all the time four, five, six years ahead.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Ocean Network Express (ONE) has increased its ownership stake in its largest provider of chartered tonnage, becoming the largest external shareholder of Poseidon Corp. in a transaction potentially valued at close to $1 billion. ONE said in a statement Tuesday it signed an agreement to acquire an additional stake in Poseidon, the parent company of Singapore-based container shipowner Seaspan, from existing shareholders. ONE said the purchase brings its stake in Poseidon to 48.9%. ONE did not say how much it paid for the additional stake. But Canadian insurance company Fairfax Financial said separately Tuesday that it sold about half of its stake in Poseidon for $1.91 billion, with half of that stake going to an existing Poseidon shareholder who will increase their ownership stake. The other half of Fairfax’s stake was sold to unidentified strategic investors. ONE CEO Jeremy Nixon said in the statement that the investment in Poseidon is part of the carrier’s growth strategy through 2030. ONE currently has a fleet of 281 ships amounting to 2.2 million TEUs. Of that, Seaspan has chartered some 43 container ships to ONE, amounting to about 417,000 TEUs in capacity. “Since our initial investment in 2023, Seaspan has achieved remarkable growth as the world’s leading tonnage platform,” Nixon said. “We are pleased to acquire this additional stake in Poseidon, which fully aligns with our ONE 2030 strategic growth plan.” Poseidon took a nearly one-third ownership stake in Seaspan in 2023 for $1.4 billion . The group included Fairfax, investor David Sokol, and the Washington family, which originally owned Seaspan. Sokol and the Washington family pooled their existing shares to take Seaspan private that year. Tight supply-demand balance Speaking at the Journal of Commerce’s TPM26 conference in Long Beach last week, Nixon said it’s important for ONE to continue investing in new vessels because the global supply and demand balance remains tight. ONE’s 2030 strategy includes reaching 3 million TEU in carrier capacity. The trans-Pacific market is only expected to see slight growth this year, Nixon said. But north-south trade and intra-regional trades are growing at double-digit rates, keeping further pressure on ship supply. “The charter market is so tight. There are really no ships available,” Nixon said at TPM26. “Carriers have to be thinking all the time four, five, six years ahead.” Contact Michael Angell at michael.angell@spglobal.com .

Trans-Pacific

ONE boosts ownership stake in Seaspan parent Poseidon

<div class="phx-topic abstract-wrapper">Ports closest to the Persian Gulf are under mounting pressure with a second round of containers inbound as carriers start to offload cargo that was already on the water last week when Middle East bookings were canceled.</div>

Ports closest to the Persian Gulf are under mounting pressure with a second round of containers inbound as carriers start to offload cargo that was already on the water last week when Middle East bookings were canceled.

<div class="phx-topic">Congestion from unexpected volumes is building at container ports outside the war-torn Persian Gulf as cargo that was en route to ports located on the west side of the narrow Strait of Hormuz is discharged early. Ports across the Persian Gulf — including regional transhipment powerhouse Jebel Ali, Abu Dhabi, Doha and Kuwait — were shut down after the US launched air strikes on Iran on Feb. 28. Some of the ports have since resumed operations, but vessel arrivals remain limited as the war rages on. Bottlenecks are growing at ports closest to the Persian Gulf with mounting congestion at Khor Fakkan on the eastern coast of the United Arab Emirates, Sohar in Oman, Karachi in Pakistan and Mundra and Nhava Sheva in India, according to Destine Ozuygur, senior market analyst at rate benchmarking platform Xeneta. “Essentially, it’s still a matter of ‘how close can we get to our original destination without putting our crews at risk and what does our insurance coverage allow?’” she told the Journal of Commerce Tuesday. Another wave of containers is inbound as carriers look for ports to discharge cargo that had already departed Asia when booking suspensions were announced for the ports in the UAE, Oman, Iraq, Kuwait, Jordan, Qatar, Bahrain and Saudi Arabia. “[The containers] will be split with some discharging at major transshipment hubs like Singapore, Colombo [Sri Lanka] and Tanjung Pelepas [Malaysia] and others trying to get closer to Indian ports or even to the east coast of the UAE,” she said. “But at this stage the closer you get to the conflict, the more you can expect to face delays.” According to a Xeneta analysis of AIS vessel positioning data and the number of services at each port, Karachi is currently 80% congested, with average wait times of 2.5 days; Sohar is 100% congested, with average waits of 5.9 days; and Khor Fakkan is at 100%. Nhava Sheva is currently at 57%, with average wait times of 2.8 days, well above the norm for this port, while Mundra is currently at 55%, with vessels waiting two days on average. Aden has gone from being relatively uncongested to between 77% and 100% since March 3 and is currently at 88%, with average wait times of nine days. <h3>Containers trapped inside Persian Gulf </h3>The US launched an intense wave of air strikes on Iran on Feb. 28 with Tehran retaliating, swiftly plunging the region into a no-go area for air and ocean transport. Container terminals and airports across the Persian Gulf shut down as Iran targeted US bases in the UAE, Oman and Bahrain. While the regional hub of Jebel Ali in the UAE is now operational, an advisory from Crane Worldwide Logistics notes that vessel arrivals remain limited due to network disruption and the high cost of war risk insurance for any vessel attempting to pass through the Strait of Hormuz. Sea-Intelligence Maritime Analysis noted that 47 regular deep-sea services call at ports within the Persian Gulf, generating a combined 336 individual port calls in January that represented a total nominal capacity of 1.32 million TEUs entering the region. Half of all the port calls were made at Jebel Ali. Based on that data, the analyst estimated that 204,159 TEUs of capacity remains trapped inside the Persian Gulf, and with no safe routes into or out of the region, this will inevitably lead to equipment shortages in Asia. “The Persian Gulf is structurally a net-import region for containerized cargo,” Sea-Intelligence wrote in its Sunday Spotlight newsletter, with deep-sea services discharging laden imports and loading empty boxes to reposition back to Asian manufacturing hubs. “By trapping over 200,000 TEUs of capacity — and the physical boxes sitting on those vessels and in Gulf terminals — the closure simultaneously starves Asian export hubs of vital equipment, potentially causing container shortages in the Far East,” Sea-Intelligence CEO Alan Murphy warned. The Asia-Europe trades are already facing a growing equipment imbalance from persistent congestion at European hub ports, and Container Trades Statistics (CTS) CEO Nigel Pusey warned that the US-Iran war will worsen the situation. “The Middle East and India are interwoven into many schedules of many carriers, so there is going to be a massive impact,” Pusey told the Journal of Commerce’s TPM26 conference in Long Beach. “It’s probably far too early to say what’s going to happen, but the imbalance is going to get far worse.” <h3>Rates, volatility on the rise </h3>Meanwhile, rate increases into India, Egypt and East Mediterranean ports are reflecting the conflict-driven disruption in the Middle East. Since Feb. 28, rates from Asia to India are up almost 30% and Asia-East Mediterranean are up 11%, according to Xeneta. Carriers are also hitting shippers with significant surcharges that range between $2,500 and $3,500 per TEU. “Due to the volatility of the ongoing situation, there is a need for alternative solutions to bringing your cargo to final destination, including finding alternative routing and storage in transit,” Maersk noted in an update Monday. The Maersk emergency freight rate of $3,000 per FEU will be charged on cargo to or from ports in Iraq, Kuwait, Damman and Jubai in Saudi Arabia, Bahrain, Qatar, the UAE and Oman, except Salalah, and covers 14 days of storage in transit. The closure of the Strait of Hormuz, a strategic chokepoint for global energy and trade flows, has triggered volatility in oil and LNG markets and halted shipping through a route responsible for a significant share of global energy exports. Ben Farrell, CEO of the Chartered Institute of Procurement and Supply (CIPS), said disruption in such a critical region was rippling rapidly across industries, markets and continents. “This is not just about shipping routes; it is about energy security, global manufacturing and the cost of moving goods around the world,” he said in a statement Tuesday. “Supply chains are more resilient than they were five years ago, but prolonged disruption in such a critical corridor will inevitably create cost pressures and operational challenges across the global economy.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Congestion from unexpected volumes is building at container ports outside the war-torn Persian Gulf as cargo that was en route to ports located on the west side of the narrow Strait of Hormuz is discharged early. Ports across the Persian Gulf — including regional transhipment powerhouse Jebel Ali, Abu Dhabi, Doha and Kuwait — were shut down after the US launched air strikes on Iran on Feb. 28. Some of the ports have since resumed operations, but vessel arrivals remain limited as the war rages on. Bottlenecks are growing at ports closest to the Persian Gulf with mounting congestion at Khor Fakkan on the eastern coast of the United Arab Emirates, Sohar in Oman, Karachi in Pakistan and Mundra and Nhava Sheva in India, according to Destine Ozuygur, senior market analyst at rate benchmarking platform Xeneta. “Essentially, it’s still a matter of ‘how close can we get to our original destination without putting our crews at risk and what does our insurance coverage allow?’” she told the Journal of Commerce Tuesday. Another wave of containers is inbound as carriers look for ports to discharge cargo that had already departed Asia when booking suspensions were announced for the ports in the UAE, Oman, Iraq, Kuwait, Jordan, Qatar, Bahrain and Saudi Arabia. “[The containers] will be split with some discharging at major transshipment hubs like Singapore, Colombo [Sri Lanka] and Tanjung Pelepas [Malaysia] and others trying to get closer to Indian ports or even to the east coast of the UAE,” she said. “But at this stage the closer you get to the conflict, the more you can expect to face delays.” According to a Xeneta analysis of AIS vessel positioning data and the number of services at each port, Karachi is currently 80% congested, with average wait times of 2.5 days; Sohar is 100% congested, with average waits of 5.9 days; and Khor Fakkan is at 100%. Nhava Sheva is currently at 57%, with average wait times of 2.8 days, well above the norm for this port, while Mundra is currently at 55%, with vessels waiting two days on average. Aden has gone from being relatively uncongested to between 77% and 100% since March 3 and is currently at 88%, with average wait times of nine days. Containers trapped inside Persian Gulf The US launched an intense wave of air strikes on Iran on Feb. 28 with Tehran retaliating, swiftly plunging the region into a no-go area for air and ocean transport. Container terminals and airports across the Persian Gulf shut down as Iran targeted US bases in the UAE, Oman and Bahrain. While the regional hub of Jebel Ali in the UAE is now operational, an advisory from Crane Worldwide Logistics notes that vessel arrivals remain limited due to network disruption and the high cost of war risk insurance for any vessel attempting to pass through the Strait of Hormuz. Sea-Intelligence Maritime Analysis noted that 47 regular deep-sea services call at ports within the Persian Gulf, generating a combined 336 individual port calls in January that represented a total nominal capacity of 1.32 million TEUs entering the region. Half of all the port calls were made at Jebel Ali. Based on that data, the analyst estimated that 204,159 TEUs of capacity remains trapped inside the Persian Gulf, and with no safe routes into or out of the region, this will inevitably lead to equipment shortages in Asia. “The Persian Gulf is structurally a net-import region for containerized cargo,” Sea-Intelligence wrote in its Sunday Spotlight newsletter, with deep-sea services discharging laden imports and loading empty boxes to reposition back to Asian manufacturing hubs. “By trapping over 200,000 TEUs of capacity — and the physical boxes sitting on those vessels and in Gulf terminals — the closure simultaneously starves Asian export hubs of vital equipment, potentially causing container shortages in the Far East,” Sea-Intelligence CEO Alan Murphy warned. The Asia-Europe trades are already facing a growing equipment imbalance from persistent congestion at European hub ports, and Container Trades Statistics (CTS) CEO Nigel Pusey warned that the US-Iran war will worsen the situation. “The Middle East and India are interwoven into many schedules of many carriers, so there is going to be a massive impact,” Pusey told the Journal of Commerce’s TPM26 conference in Long Beach. “It’s probably far too early to say what’s going to happen, but the imbalance is going to get far worse.” Rates, volatility on the rise Meanwhile, rate increases into India, Egypt and East Mediterranean ports are reflecting the conflict-driven disruption in the Middle East. Since Feb. 28, rates from Asia to India are up almost 30% and Asia-East Mediterranean are up 11%, according to Xeneta. Carriers are also hitting shippers with significant surcharges that range between $2,500 and $3,500 per TEU. “Due to the volatility of the ongoing situation, there is a need for alternative solutions to bringing your cargo to final destination, including finding alternative routing and storage in transit,” Maersk noted in an update Monday. The Maersk emergency freight rate of $3,000 per FEU will be charged on cargo to or from ports in Iraq, Kuwait, Damman and Jubai in Saudi Arabia, Bahrain, Qatar, the UAE and Oman, except Salalah, and covers 14 days of storage in transit. The closure of the Strait of Hormuz, a strategic chokepoint for global energy and trade flows, has triggered volatility in oil and LNG markets and halted shipping through a route responsible for a significant share of global energy exports. Ben Farrell, CEO of the Chartered Institute of Procurement and Supply (CIPS), said disruption in such a critical region was rippling rapidly across industries, markets and continents. “This is not just about shipping routes; it is about energy security, global manufacturing and the cost of moving goods around the world,” he said in a statement Tuesday. “Supply chains are more resilient than they were five years ago, but prolonged disruption in such a critical corridor will inevitably create cost pressures and operational challenges across the global economy.” Contact Greg Knowler at greg.knowler@spglobal.com .

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Waves of diverted containers swamping Middle East ports

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