<div class="phx-topic abstract-wrapper">Global air freight volumes declined by 1 percent last year, but traffic could improve quickly this year if the overall economic situation improves, according to Airports Council International.</div>

Global air freight volumes declined by 1 percent last year, but traffic could improve quickly this year if the overall economic situation improves, according to Airports Council International.

<div>Global air freight volumes declined by 1 percent last year, but traffic could improve quickly this year if the overall economic situation improves, according to Airports Council International.ACI said growth in global international and domestic freight tonnage was &amp;ldquo;flat&amp;rdquo; in December, but this could be a &amp;ldquo;positive indicator&amp;rdquo; after seven months of year-over-year declines.&amp;ldquo;While air freight began the year in positive territory in 2011, a sustained decline in growth rates was apparent from the month of May and thereafter where growth only converged to zero percent in December 2011,&amp;rdquo; said ACI.International air freight tonnage declines in 2011 were recorded at...

Global air freight volumes declined by 1 percent last year, but traffic could improve quickly this year if the overall economic situation improves, according to Airports Council International. ACI said growth in global international and domestic freight tonnage was &ldquo;flat&rdquo; in December, but this could be a &ldquo;positive indicator&rdquo; after seven months of year-over-year declines. &ldquo;While air freight began the year in positive territory in 2011, a sustained decline in growth rates was apparent from the month of May and thereafter where growth only converged to zero percent in December 2011,&rdquo; said ACI. International air freight tonnage declines in 2011 were recorded at airports in the Middle East (down 0.6 percent), North America (down 1.1 percent) and the Asia Pacific (down 3 percent), the latter the largest region by tonnage and now almost three times the size of the North America market. But cross-border air freight operators did see growth in Africa (12.4 percent) &mdash; from a narrow base &mdash; Latin America and the Caribbean (7.2 percent) and, surprisingly, Europe (1.7 percent). Rafael Echevarne, ACI world director of economics, said 2011 showed how sensitive to economic fortunes the air cargo sector is. &ldquo;As governments slowly adopt the necessary austerity measures to deleverage their balance sheets, certain economies may experience an economic slowdown in the short run thereby having an impact on international trade,&rdquo; he added. &ldquo;However, as business confidence resumes, so will global trade in air freight.&rdquo; -- Contact Mike King at michael@borderline.eu.com

Air Cargo Carriers News

Air Cargo

Air Cargo Forwarder News

Airports Expect Sharp Cargo Rise If Economy Improves

<div class="phx-topic abstract-wrapper">The move comes at a delicate moment — months before dockworker negotiations are set to begin on Canada’s West Coast in November ahead of the expiration of the current contract next March.</div>

The move comes at a delicate moment — months before dockworker negotiations are set to begin on Canada’s West Coast in November ahead of the expiration of the current contract next March.

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<div class="phx-topic">The government of Canadian Prime Minister Mark Carney, emboldened by a newly achieved parliamentary majority and with a mandate to diversify exports, is seeking landmark changes to the country’s labor relations law to reduce disruption at seaports and other transport modes. A formal consultation announced on April 17, the first formal review of World War II-era labor relations law in decades, has “traction” in Ottawa, according to one source. It comes at a delicate moment — months before longshore labor negotiations are set to begin on Canada’s West Coast in November ahead of the expiration of the current contract on March 31, 2027. Any changes to labor law would require the approval of Canada’s Parliament. A 13-day Canadian West Coast <a href="https://www.joc.com/article/ilwu-canada-contract-ratification-ensures-bc-port-peace-5220992">work stoppage in 2023</a> and a 10-day strike followed by a <a href="https://www.joc.com/article/bc-container-ports-set-for-shutdown-after-foremen-begin-strike-5785499">lockout of dockworkers by employers in late 2024</a> were the longest port disruptions seen on the Canadian West Coast since the early 1990s. It sparked a defection of both US- and Canada-bound containerized cargo to US ports that has not returned, a source told the Journal of Commerce. The 2023 strike prompted an inquiry and resulting <a href="https://www.canada.ca/en/employment-social-development/programs/labour-relations/reports/industrial-inquiry-commission-longshoring-west-coast-ports.html#9.3">recommendations</a> by Canada labor relations guru Vincent Ready last year that will now be formally considered by the Liberal government in Ottawa, which with a newly secured majority can enact legislation. ”We simply cannot afford the risk of a shutdown in critical supply chains anymore,” Canada’s Transport Minister Steve MacKinnon <a href="https://www.youtube.com/watch?v=on9x93BO9-Y">said in a speech in March</a>. “We can’t afford a reputation as an unpredictable place to do business.” Sources are cautious about predicting the possibility of disruption at Vancouver and Prince Rupert this fall or early next year tied to the coming negotiations. Some say cooler heads have prevailed since the 2024 lockout, but acknowledge that labor negotiations are inherently unpredictable. Others are skeptical about the talk of cooler heads. “The parties are the same, the issues are the same, and nothing has changed (since the Ready report), so we are very concerned,” said Bruce Rogers, executive director of CIFFA, the group representing Canadian forwarders. “For Canada, we have gone through these issues too often. The threat or hint of labor disruption is going to lead to cargo being diverted and that is problematic for us in Canada.” <h3>’Growing desire...to bring stability’ </h3>Among the recommendations in the report authored by Ready and Amanda Rogers, both labor arbitrators, are preserving the right to strike or lock out workers, but at the same time strengthening the role of mediators and formalizing a British Columbia-wide labor bargaining unit, all with the goal of creating greater supply chain certainty following years of disruption of transport networks. In 2024, Canada’s transportation and warehousing sector experienced the greatest number of “person days not worked” due to work stoppages since 1966, according to a <a href="https://www.railcan.ca/wp-content/uploads/2025/05/RAC-Work-Stoppages-Report-2025-EN3-1.pdf">report</a> by the Railway Association of Canada. The report noted that Canada has consistently ranked as one of the countries with the highest number of days lost to work stoppages relative to employment levels, according to the OECD. “There is growing desire in Ottawa to bring stability and see both sides (in the longshore arena) bring differences to closure quicker and with less impact on the GDP,” said a knowledgeable observer of the port sector. The backdrop is a radical course correction led by Carney to reduce dependence on US trade. In response to multiple waves of tariffs imposed on Canada by the Trump administration, Carney set a goal of doubling Canadian exports to countries other than the US within the next decade. The US <a href="https://international.canada.ca/en/global-affairs/corporate/reports/chief-economist/monthly/2025-12?utm_source=chatgpt.com">share</a> of Canadian goods exports fell 4.2 percentage points to 71.7% last year compared to 2024, the lowest share since the early 1980s, according to government statistics. That pivot is the backdrop to other key recent developments, including the <a href="https://www.joc.com/article/dp-world-to-build-big-ship-container-terminal-in-montreal-6077326">Contrecoeur container terminal moving forward</a> outside Montreal after years of being stalled, and <a href="https://www.joc.com/article/gct-vancouver-port-to-jointly-study-roberts-bank-terminal-project-6207642">a deal announced last week</a> by Global Container Terminals (GCT) and the Vancouver Fraser Port Authority (VFPA) to explore joint development and operation of Roberts Bank Terminal 2, a major potential port expansion. And just days ago, <a href="https://www.joc.com/article/customs-designation-triggers-qsl-terminal-project-in-quebec-city-6209525">plans were revealed</a> for a 200,000-TEU container terminal along the St. Lawrence in Quebec City. The need to ensure supply chain stability to facilitate the pivot away from US dependence has emerged as a national priority for Canada. Maritime employers are aligning themselves with that priority, which is reflected in the labor law consultation, as they head into negotiations with the Canadian division of the International Longshore and Warehouse Union (ILWU) this fall. “When waterfront operations are predictable and reliable, the entire supply chain benefits, from workers and employers to Canadian businesses and global trading partners,” Eric Waltz, GCT president and chair of the British Columbia Maritime Employers Association board, <a href="https://www.bcmaritime.com/bcmea-2025-annual-report-highlights-measured-growth-action-needed-to-protect-port-stability-and-sustain-benefits-for-workers-and-canadians/">said in a statement</a>. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

The government of Canadian Prime Minister Mark Carney, emboldened by a newly achieved parliamentary majority and with a mandate to diversify exports, is seeking landmark changes to the country’s labor relations law to reduce disruption at seaports and other transport modes. A formal consultation announced on April 17, the first formal review of World War II-era labor relations law in decades, has “traction” in Ottawa, according to one source. It comes at a delicate moment — months before longshore labor negotiations are set to begin on Canada’s West Coast in November ahead of the expiration of the current contract on March 31, 2027. Any changes to labor law would require the approval of Canada’s Parliament. A 13-day Canadian West Coast work stoppage in 2023 and a 10-day strike followed by a lockout of dockworkers by employers in late 2024 were the longest port disruptions seen on the Canadian West Coast since the early 1990s. It sparked a defection of both US- and Canada-bound containerized cargo to US ports that has not returned, a source told the Journal of Commerce. The 2023 strike prompted an inquiry and resulting recommendations by Canada labor relations guru Vincent Ready last year that will now be formally considered by the Liberal government in Ottawa, which with a newly secured majority can enact legislation. ”We simply cannot afford the risk of a shutdown in critical supply chains anymore,” Canada’s Transport Minister Steve MacKinnon said in a speech in March . “We can’t afford a reputation as an unpredictable place to do business.” Sources are cautious about predicting the possibility of disruption at Vancouver and Prince Rupert this fall or early next year tied to the coming negotiations. Some say cooler heads have prevailed since the 2024 lockout, but acknowledge that labor negotiations are inherently unpredictable. Others are skeptical about the talk of cooler heads. “The parties are the same, the issues are the same, and nothing has changed (since the Ready report), so we are very concerned,” said Bruce Rogers, executive director of CIFFA, the group representing Canadian forwarders. “For Canada, we have gone through these issues too often. The threat or hint of labor disruption is going to lead to cargo being diverted and that is problematic for us in Canada.” ’Growing desire...to bring stability’ Among the recommendations in the report authored by Ready and Amanda Rogers, both labor arbitrators, are preserving the right to strike or lock out workers, but at the same time strengthening the role of mediators and formalizing a British Columbia-wide labor bargaining unit, all with the goal of creating greater supply chain certainty following years of disruption of transport networks. In 2024, Canada’s transportation and warehousing sector experienced the greatest number of “person days not worked” due to work stoppages since 1966, according to a report by the Railway Association of Canada. The report noted that Canada has consistently ranked as one of the countries with the highest number of days lost to work stoppages relative to employment levels, according to the OECD. “There is growing desire in Ottawa to bring stability and see both sides (in the longshore arena) bring differences to closure quicker and with less impact on the GDP,” said a knowledgeable observer of the port sector. The backdrop is a radical course correction led by Carney to reduce dependence on US trade. In response to multiple waves of tariffs imposed on Canada by the Trump administration, Carney set a goal of doubling Canadian exports to countries other than the US within the next decade. The US share of Canadian goods exports fell 4.2 percentage points to 71.7% last year compared to 2024, the lowest share since the early 1980s, according to government statistics. That pivot is the backdrop to other key recent developments, including the Contrecoeur container terminal moving forward outside Montreal after years of being stalled, and a deal announced last week by Global Container Terminals (GCT) and the Vancouver Fraser Port Authority (VFPA) to explore joint development and operation of Roberts Bank Terminal 2, a major potential port expansion. And just days ago, plans were revealed for a 200,000-TEU container terminal along the St. Lawrence in Quebec City. The need to ensure supply chain stability to facilitate the pivot away from US dependence has emerged as a national priority for Canada. Maritime employers are aligning themselves with that priority, which is reflected in the labor law consultation, as they head into negotiations with the Canadian division of the International Longshore and Warehouse Union (ILWU) this fall. “When waterfront operations are predictable and reliable, the entire supply chain benefits, from workers and employers to Canadian businesses and global trading partners,” Eric Waltz, GCT president and chair of the British Columbia Maritime Employers Association board, said in a statement . Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Transport, Trade and Regulation News

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North American ports

Marine terminals

Longshore labor

Maritime

Canadian review of labor laws linked to hoped-for longshore peace, US diversification

<div class="phx-topic abstract-wrapper">The chairman of the US maritime regulator said the agency could act against ocean carriers or foreign-flag ships should the IMO’s Marine Environment Protection Committee take further steps to adopt its plan to reduce emissions from shipping. </div>

The chairman of the US maritime regulator said the agency could act against ocean carriers or foreign-flag ships should the IMO’s Marine Environment Protection Committee take further steps to adopt its plan to reduce emissions from shipping.

<div class="phx-topic">Federal Maritime Commission (FMC) Chairman Laura DiBella is reiterating US opposition to proposed international rules for reducing greenhouse gas emissions, saying she will use the agency’s enforcement powers to block any move that would increase costs for US shippers. DiBella said in a statement late Monday she will attend this week’s meeting in London of the International Maritime Organization’s (IMO’s) Marine Environment Protection Committee (MEPC). The meeting includes a session on adopting rules for reducing shipping’s carbon emissions under the <a href="https://www.joc.com/article/imo-punts-on-pivotal-net-zero-shipping-regulation-6099141">IMO’s proposed “net-zero” framework</a> (NZF). The Trump administration has made clear its opposition to the net-zero framework, even <a href="https://www.joc.com/article/us-pulls-out-of-imo-climate-talks-threatens-retaliation-for-emissions-fees-5980359">threatening to leave the IMO due to the issue</a>. DiBella said she will be “reinforcing” that message during her trip. “The NZF is an unnecessary tax on US shippers and vessels operating in international waters,” she said. “The NZF would cost the maritime industry billions of dollars annually. As the largest consumer of imported goods, these costs will be directly passed onto US consumers.” The NZF aims to set global standards for shipping’s carbon emissions and create a greenhouse gas pricing mechanism for ocean carriers to sharply reduce emissions by 2050. The NZF took a big step forward with the formal adoption of <a href="https://www.joc.com/article/imo-sets-out-path-to-decarbonize-shipping-after-contentious-climate-talks-5982209">a two-tier pricing mechanism at the April 2025 MEPC meeting</a>. The US delegation walked out of the last MEPC meeting in October when heavy pressure from the US forced the group to delay adoption of the net-zero framework for one year, until MEPC’s meeting this November. DiBella said the FMC could act against ocean carriers or foreign-flag ships should the IMO take further steps to adopt the NZF. “If unfavorable shipping conditions are found, the FMC can take remedial steps, including imposing fines and barring foreign-flag vessels from calling at US ports,” the statement said. “In defense of US shippers, [I have] explained to IMO member countries that the NZF will have an anticompetitive and inflationary effect on the global economy.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Federal Maritime Commission (FMC) Chairman Laura DiBella is reiterating US opposition to proposed international rules for reducing greenhouse gas emissions, saying she will use the agency’s enforcement powers to block any move that would increase costs for US shippers. DiBella said in a statement late Monday she will attend this week’s meeting in London of the International Maritime Organization’s (IMO’s) Marine Environment Protection Committee (MEPC). The meeting includes a session on adopting rules for reducing shipping’s carbon emissions under the IMO’s proposed “net-zero” framework (NZF). The Trump administration has made clear its opposition to the net-zero framework, even threatening to leave the IMO due to the issue . DiBella said she will be “reinforcing” that message during her trip. “The NZF is an unnecessary tax on US shippers and vessels operating in international waters,” she said. “The NZF would cost the maritime industry billions of dollars annually. As the largest consumer of imported goods, these costs will be directly passed onto US consumers.” The NZF aims to set global standards for shipping’s carbon emissions and create a greenhouse gas pricing mechanism for ocean carriers to sharply reduce emissions by 2050. The NZF took a big step forward with the formal adoption of a two-tier pricing mechanism at the April 2025 MEPC meeting . The US delegation walked out of the last MEPC meeting in October when heavy pressure from the US forced the group to delay adoption of the net-zero framework for one year, until MEPC’s meeting this November. DiBella said the FMC could act against ocean carriers or foreign-flag ships should the IMO take further steps to adopt the NZF. “If unfavorable shipping conditions are found, the FMC can take remedial steps, including imposing fines and barring foreign-flag vessels from calling at US ports,” the statement said. “In defense of US shippers, [I have] explained to IMO member countries that the NZF will have an anticompetitive and inflationary effect on the global economy.” Contact Michael Angell at michael.angell@spglobal.com .

Container Shipping News

FMC’s DiBella brings anti-‘net-zero’ message to IMO London meeting

<div class="phx-topic abstract-wrapper">Some ships have been forced to bunker at alternative ports, but the war-driven energy shock hasn’t yet impacted the deployment of tonnage, ocean carriers said at an industry event in Georgia. </div>

Some ships have been forced to bunker at alternative ports, but the war-driven energy shock hasn’t yet impacted the deployment of tonnage, ocean carriers said at an industry event in Georgia.

<div class="phx-topic">Sea Island, Georgia — Container line executives on Tuesday acknowledged that bunker fuel supplies globally are tightening amid the war-driven energy shock, causing congestion at some fuel hubs and forcing some ships to bunker at alternative ports. But they stopped short of saying there were outright fuel shortages that were impacting services. The tighter supplies are requiring more pre-booking work and coordination, but there haven’t been “shortages per se yet,” Fabio Santucci, president of Mediterranean Shipping Co.’s US office, said at the Georgia International Trade Conference. Stuart Sandlin, president of Hapag-Lloyd North America, concurred, adding that while rising fuel costs are a problem, “there weren’t any red flags yet.” Shipping analysts <a href="https://www.joc.com/article/container-shipping-faces-blank-sailings-falling-demand-from-prolonged-iran-war-6208766">have warned</a> that ocean carriers may be forced to blank sailings and even outright cancel services in the coming months if bunker fuel supplies continue to tighten amid the ongoing closure of the Strait of Hormuz, through which 20% of the world’s oil supplies typically transit. For now, the focus for shippers is getting a handle on how much more they’ll be paying for fuel, how those costs are calculated, and how much more energy costs could rise. The roughly doubling of the cost of bunker fuel since the war in the Middle East began in late February has spurred ocean carriers to implement emergency fuel surcharges of hundreds of dollars per container, in addition to raising prices via the quarterly bunker adjustment factor (BAF). Because BAFs won’t reset until July 1, Hapag-Lloyd has so far had to eat the nearly doubling of energy costs, equating to <a href="https://www.joc.com/article/war-adding-40-50-million-per-week-to-hapag-lloyds-costs-ceo-6193532">about $50 million weekly</a>, Sandlin said. “We also [told shippers] that whatever you give us in that emergency fuel surcharge because it’s in the rear, when the fuel price goes down, we will also give you back every ounce of money you paid us in the emergency fuel surcharge,’” Sandlin said. “We’re not looking to double dip on awards.” <h3>No import cuts yet </h3>Ocean carrier executives said they haven’t seen a pullback in US importing since the war began, but noted 2026 would be a challenging year for volume with zero or minimal trade growth expected. US laden imports were down 5.2% year over year in the first quarter, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. Still, March imports of 2.33 million TEUs were the highest since last August. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ca83526a-50c9-4e3b-b637-6bc435f00c93"></dynamic-object></div>Volumes are holding up currently amid seasonal restocking, with major shipper customers saying they are planning for steady shipments for at least the next three months, Sandlin said. “[However], costs are rising much quicker than the revenues for us on the carrier side, and I think that that’s a little bit of a risk because you’ve got to redeploy your assets to make profitable asset utilization,” he said. “If your services start to not be making a lot of money, then I think you have to look and see what that does for the long-term reliability of your import and export supply chains.” Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Sea Island, Georgia — Container line executives on Tuesday acknowledged that bunker fuel supplies globally are tightening amid the war-driven energy shock, causing congestion at some fuel hubs and forcing some ships to bunker at alternative ports. But they stopped short of saying there were outright fuel shortages that were impacting services. The tighter supplies are requiring more pre-booking work and coordination, but there haven’t been “shortages per se yet,” Fabio Santucci, president of Mediterranean Shipping Co.’s US office, said at the Georgia International Trade Conference. Stuart Sandlin, president of Hapag-Lloyd North America, concurred, adding that while rising fuel costs are a problem, “there weren’t any red flags yet.” Shipping analysts have warned that ocean carriers may be forced to blank sailings and even outright cancel services in the coming months if bunker fuel supplies continue to tighten amid the ongoing closure of the Strait of Hormuz, through which 20% of the world’s oil supplies typically transit. For now, the focus for shippers is getting a handle on how much more they’ll be paying for fuel, how those costs are calculated, and how much more energy costs could rise. The roughly doubling of the cost of bunker fuel since the war in the Middle East began in late February has spurred ocean carriers to implement emergency fuel surcharges of hundreds of dollars per container, in addition to raising prices via the quarterly bunker adjustment factor (BAF). Because BAFs won’t reset until July 1, Hapag-Lloyd has so far had to eat the nearly doubling of energy costs, equating to about $50 million weekly , Sandlin said. “We also [told shippers] that whatever you give us in that emergency fuel surcharge because it’s in the rear, when the fuel price goes down, we will also give you back every ounce of money you paid us in the emergency fuel surcharge,’” Sandlin said. “We’re not looking to double dip on awards.” No import cuts yet Ocean carrier executives said they haven’t seen a pullback in US importing since the war began, but noted 2026 would be a challenging year for volume with zero or minimal trade growth expected. US laden imports were down 5.2% year over year in the first quarter, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Still, March imports of 2.33 million TEUs were the highest since last August. Volumes are holding up currently amid seasonal restocking, with major shipper customers saying they are planning for steady shipments for at least the next three months, Sandlin said. “[However], costs are rising much quicker than the revenues for us on the carrier side, and I think that that’s a little bit of a risk because you’ve got to redeploy your assets to make profitable asset utilization,” he said. “If your services start to not be making a lot of money, then I think you have to look and see what that does for the long-term reliability of your import and export supply chains.” Contact Mark Szakonyi at  mark.szakonyi@spglobal.com .

Container lines

Tighter bunker supplies raising costs, but not impacting service: ocean carriers

<div class="phx-topic abstract-wrapper">Baker Hughes, Halliburton and SLB, key drivers of oil and gas project cargoes, say infrastructure repair in the Middle East and supply diversification moves outside the region should result in a heavy book of post-war work.</div>

Baker Hughes, Halliburton and SLB, key drivers of oil and gas project cargoes, say infrastructure repair in the Middle East and supply diversification moves outside the region should result in a heavy book of post-war work.

<div class="phx-topic">Despite supply chain disruptions and logistics cost increases caused by the US-Israeli war with Iran and the subsequent closure of the Strait of Hormuz, the world’s three largest oilfield services providers are forecasting a windfall of oil and gas projects in the coming years. Should they materialize, the projects would result in a flood of orders for industrial project cargo and breakbulk steel shipments globally. Executives with Baker Hughes, Halliburton and SLB echoed one another’s market outlook that came in their latest quarterly earnings statements, all of which were released in late April. The three Houston-based companies, key drivers of oil and gas project cargoes, face significant exposure to market volatility in the Middle East. During his company’s first-quarter earnings call April 24, SLB CEO Olivier Le Peuch said the global oil and gas supply has lost over 500 million barrels of oil production because of the conflict. “In this environment, energy security remains at the forefront,” Le Peuch said. “We expect many countries to accelerate efforts to diversify supply, strengthen domestic resource development and rebuild strategic and commercial inventories that have been drawn down during the conflict.” War-related disruptions in the Middle East — including energy infrastructure shutdowns in Qatar and Iraq and operational interruptions throughout the region — took a toll on SLB in the first quarter. Net income fell 6% year over year to $752 million, and SLB said its earnings are expected to decrease by 6 to 8 cents per share in the second quarter compared with the first quarter. Le Peuch cited three primary drivers of global energy projects for 2027 and 2028: the replenishment of depleted oil and gas inventories, the diversification of supply, and countries investing in local oil and gas projects to support long-term energy independence. “The fragility of the global energy complex we are witnessing today demonstrates the strategic importance and long-term value of oil and gas,” he said. <h3>Halliburton looks to long game </h3>Halliburton expects the Middle East conflict to drive long-term growth from countries seeking energy security through investments in their own oil and gas projects. The company’s net income for the first quarter shot up 126% over last year to $461 million, or 55 cents per share. But citing rising costs for supply chain logistics and fuel, Halliburton said the company expects a decline of 7 to 9 cents per share in the second quarter compared with the first. “The closure of the Strait [of Hormuz] has resulted in our use of alternative supply chain routes, which has increased logistics costs,” Halliburton COO Shannon Slocum said during the company’s April 21 first-quarter earnings call. “We have also seen price increases in purchased materials and supplies related to the conflict.” Halliburton CEO Jeffrey Miller said the conflict has eliminated the supply overhang for global oil and gas markets. With that, energy security has become a core priority fueling project investments and oilfield services activity. “The world is fundamentally tighter in oil and gas than it was 60 days ago,” Miller said on the earnings call. He said the market trend supports a stronger environment for countries to invest in localized oil and gas projects to ensure a reliable energy supply while reducing dependency on shipments from the Middle East. The recent geopolitical disruptions are also creating an urgency to diversify in countries without their own oil and gas resources. “Energy security is no longer a talking point,” Miller said. “That is going to drive activity, and I think that change is not temporal, but a solid few years.” <h3>Baker Hughes eyes broader project mix </h3>Baker Hughes expects the spike in global demand for oil and gas to accompany an already full slate of projects in multiple sectors. The war has significantly obstructed global liquefied natural gas (LNG) markets, with 20% of worldwide LNG capacity now offline, CEO Lorenzo Simonelli said during the company’s April 24 first-quarter earnings call. “The recent infrastructure damage in the region and the effective closure of the Strait of Hormuz have materially constrained the LNG market’s ability to respond to growing demand, likely to result in a supply shortfall this year,” he said. Diversification worked to Baker Hughes’ advantage in the first quarter, as earnings increased 14% to 58 cents per share while project orders grew 26% year over year to $8.2 billion. That included $4.9 billion in orders for industrial and energy technology projects such as LNG infrastructure, industrial decarbonization, and gas turbines. Power systems, including equipment to support data centers, continue to drive growth and accounted for $1.4 billion of those new orders. “Global power demand is in a multi-year growth cycle, and it’s important to remember we’re only in the early stages,” Simonelli said, citing projections that power demand will double by 2040, driven by factors such as data centers, digital infrastructure expansion, and industrial energy transition projects. Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>. </div>

Despite supply chain disruptions and logistics cost increases caused by the US-Israeli war with Iran and the subsequent closure of the Strait of Hormuz, the world’s three largest oilfield services providers are forecasting a windfall of oil and gas projects in the coming years. Should they materialize, the projects would result in a flood of orders for industrial project cargo and breakbulk steel shipments globally. Executives with Baker Hughes, Halliburton and SLB echoed one another’s market outlook that came in their latest quarterly earnings statements, all of which were released in late April. The three Houston-based companies, key drivers of oil and gas project cargoes, face significant exposure to market volatility in the Middle East. During his company’s first-quarter earnings call April 24, SLB CEO Olivier Le Peuch said the global oil and gas supply has lost over 500 million barrels of oil production because of the conflict. “In this environment, energy security remains at the forefront,” Le Peuch said. “We expect many countries to accelerate efforts to diversify supply, strengthen domestic resource development and rebuild strategic and commercial inventories that have been drawn down during the conflict.” War-related disruptions in the Middle East — including energy infrastructure shutdowns in Qatar and Iraq and operational interruptions throughout the region — took a toll on SLB in the first quarter. Net income fell 6% year over year to $752 million, and SLB said its earnings are expected to decrease by 6 to 8 cents per share in the second quarter compared with the first quarter. Le Peuch cited three primary drivers of global energy projects for 2027 and 2028: the replenishment of depleted oil and gas inventories, the diversification of supply, and countries investing in local oil and gas projects to support long-term energy independence. “The fragility of the global energy complex we are witnessing today demonstrates the strategic importance and long-term value of oil and gas,” he said. Halliburton looks to long game Halliburton expects the Middle East conflict to drive long-term growth from countries seeking energy security through investments in their own oil and gas projects. The company’s net income for the first quarter shot up 126% over last year to $461 million, or 55 cents per share. But citing rising costs for supply chain logistics and fuel, Halliburton said the company expects a decline of 7 to 9 cents per share in the second quarter compared with the first. “The closure of the Strait [of Hormuz] has resulted in our use of alternative supply chain routes, which has increased logistics costs,” Halliburton COO Shannon Slocum said during the company’s April 21 first-quarter earnings call. “We have also seen price increases in purchased materials and supplies related to the conflict.” Halliburton CEO Jeffrey Miller said the conflict has eliminated the supply overhang for global oil and gas markets. With that, energy security has become a core priority fueling project investments and oilfield services activity. “The world is fundamentally tighter in oil and gas than it was 60 days ago,” Miller said on the earnings call. He said the market trend supports a stronger environment for countries to invest in localized oil and gas projects to ensure a reliable energy supply while reducing dependency on shipments from the Middle East. The recent geopolitical disruptions are also creating an urgency to diversify in countries without their own oil and gas resources. “Energy security is no longer a talking point,” Miller said. “That is going to drive activity, and I think that change is not temporal, but a solid few years.” Baker Hughes eyes broader project mix Baker Hughes expects the spike in global demand for oil and gas to accompany an already full slate of projects in multiple sectors. The war has significantly obstructed global liquefied natural gas (LNG) markets, with 20% of worldwide LNG capacity now offline, CEO Lorenzo Simonelli said during the company’s April 24 first-quarter earnings call. “The recent infrastructure damage in the region and the effective closure of the Strait of Hormuz have materially constrained the LNG market’s ability to respond to growing demand, likely to result in a supply shortfall this year,” he said. Diversification worked to Baker Hughes’ advantage in the first quarter, as earnings increased 14% to 58 cents per share while project orders grew 26% year over year to $8.2 billion. That included $4.9 billion in orders for industrial and energy technology projects such as LNG infrastructure, industrial decarbonization, and gas turbines. Power systems, including equipment to support data centers, continue to drive growth and accounted for $1.4 billion of those new orders. “Global power demand is in a multi-year growth cycle, and it’s important to remember we’re only in the early stages,” Simonelli said, citing projections that power demand will double by 2040, driven by factors such as data centers, digital infrastructure expansion, and industrial energy transition projects. Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

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Oilfield services majors bank on flood of oil, gas projects linked to Middle East war

<div class="phx-topic abstract-wrapper">STG’s deal with a group of lenders who filed a lawsuit in New York last year clears the way for it to emerge from bankruptcy as the company has benefited from the rebound in intermodal demand.</div>

STG’s deal with a group of lenders who filed a lawsuit in New York last year clears the way for it to emerge from bankruptcy as the company has benefited from the rebound in intermodal demand.

<div class="phx-topic">STG Logistics has cleared the last major obstacle to emerging from Chapter 11 bankruptcy next month after reaching a settlement with a group of minority lenders that had challenged its restructuring. The settlement removes the last serious challenge to STG’s reorganization and leaves the company positioned to exit bankruptcy with customers, and freight volumes, largely intact. STG, which provides transloading, drayage, and domestic intermodal services, has met all the financial commitments made when it filed for Ch. 11 bankruptcy protection in January. Those included maintaining more than $50 million in cash and staying within budget targets for revenue and expenses over the past three months. The company increased volume year over year in the first quarter in Southern California, based on data from RailState, suggesting customers did not pull back business during the restructuring. The company is the fifth-largest US domestic intermodal provider, with 15,000 containers and about $720 million in annual revenue, according to an analysis of bankruptcy filings. STG also benefited from a broader rebound in intermodal demand as March was the <a href="https://www.joc.com/article/strong-march-volumes-give-intermodal-its-first-real-stress-test-in-years-6205604">third-strongest month on record for intermodal volume</a>, according to the Intermodal Association of North America (IANA). The settlement ends a bitter fight that played out over the last two years. After expanding rapidly during the pandemic-related freight boom, including its 2022 purchase of XPO Logistics’ intermodal division, STG entered the freight downturn with too much debt. The company restructured its debt and shifted valuable assets backing older loans into a new entity beyond the reach of some existing lenders, according to Axos and Siemens, who filed a lawsuit in New York last year. In January, Axos and Siemens scored an important win when a New York court ruled that the claims against STG could move forward. Less than a week later, STG filed for bankruptcy in New Jersey, moving the fight into bankruptcy court. Axos and Siemens continued to object, but the settlement has now resolved that challenge. Terms of the agreement were not disclosed. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

STG Logistics has cleared the last major obstacle to emerging from Chapter 11 bankruptcy next month after reaching a settlement with a group of minority lenders that had challenged its restructuring. The settlement removes the last serious challenge to STG’s reorganization and leaves the company positioned to exit bankruptcy with customers, and freight volumes, largely intact. STG, which provides transloading, drayage, and domestic intermodal services, has met all the financial commitments made when it filed for Ch. 11 bankruptcy protection in January. Those included maintaining more than $50 million in cash and staying within budget targets for revenue and expenses over the past three months. The company increased volume year over year in the first quarter in Southern California, based on data from RailState, suggesting customers did not pull back business during the restructuring. The company is the fifth-largest US domestic intermodal provider, with 15,000 containers and about $720 million in annual revenue, according to an analysis of bankruptcy filings. STG also benefited from a broader rebound in intermodal demand as March was the third-strongest month on record for intermodal volume , according to the Intermodal Association of North America (IANA). The settlement ends a bitter fight that played out over the last two years. After expanding rapidly during the pandemic-related freight boom, including its 2022 purchase of XPO Logistics’ intermodal division, STG entered the freight downturn with too much debt. The company restructured its debt and shifted valuable assets backing older loans into a new entity beyond the reach of some existing lenders, according to Axos and Siemens, who filed a lawsuit in New York last year. In January, Axos and Siemens scored an important win when a New York court ruled that the claims against STG could move forward. Less than a week later, STG filed for bankruptcy in New Jersey, moving the fight into bankruptcy court. Axos and Siemens continued to object, but the settlement has now resolved that challenge. Terms of the agreement were not disclosed. Contact Ari Ashe at ari.ashe@spglobal.com .

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STG clears final obstacle to exit bankruptcy as lender dispute ends

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