<div class="phx-topic abstract-wrapper">Shippers in sectors such as aerospace, pharmaceuticals, and IT saw an average hit of $182 million from supply chain disruptions on an annualized basis, which technology provider Interos said will compel many companies to explore nearshoring options.</div>

Shippers in sectors such as aerospace, pharmaceuticals, and IT saw an average hit of $182 million from supply chain disruptions on an annualized basis, which technology provider Interos said will compel many companies to explore nearshoring options.

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<div>Supply chain disruptions in key manufacturing regions in Asia have affected shippers to the extent that companies surveyed in early 2022 by supply chain intelligence firm Interos expect they will replace half of their supplier base with near- or onshore options. Findings in Resilience 2022: The Interos Annual Global Supply Chain Report indicate that certain sectors see themselves as having supplier networks too exposed to vulnerable regions and too concentrated in number. The study looked at supplier reshoring attitudes from 1,500 technology and procurement decision makers, primarily from the aerospace and defense, financial services, IT, pharmaceutical, and government sectors. Sixty...

Supply chain disruptions in key manufacturing regions in Asia have affected shippers to the extent that companies surveyed in early 2022 by supply chain intelligence firm Interos expect they will replace half of their supplier base with near- or onshore options. Findings in Resilience 2022: The Interos Annual Global Supply Chain Report indicate that certain sectors see themselves as having supplier networks too exposed to vulnerable regions and too concentrated in number. The study looked at supplier reshoring attitudes from 1,500 technology and procurement decision makers, primarily from the aerospace and defense, financial services, IT, pharmaceutical, and government sectors. Sixty percent of respondents were based in Europe and the other 40 percent in North America. The report found that respondents saw the annual cost of supply chain disruptions at $182 million on average, or 1.7 percent of their annual revenue. The highest costs were reported in France ($230 million) and in pharmaceuticals and life sciences ($226 million), while the lowest were in UK and Ireland ($142 million) and in the financial services sector ($143 million). Perhaps most intriguingly, the report found that respondents anticipate reshoring or nearshoring 51 percent of their goods and materials suppliers over the next three years. “Supply chain operating models of the last 30 years dictated that products be manufactured where costs are lower and labor is plentiful,” the report said. “But as wage gaps have closed and logistics problems have mounted, calls to ‘reshore’ production to home countries, such as the US, or ‘nearshore’ it in adjacent ones, such as Mexico, have grown.” Calls for reshoring and nearshoring manufacturing have been common themes in shipper earnings calls in 2022, and in fact have been seen as viable strategies throughout the last decade to wean shippers off an overreliance on China in particular. But data from JOC.com sister company PIERS in mid-2022 showed virtually no erosion in companies’ dependence on China, and Asia in general, as their primary sourcing region. 'Clear appetite’ for reshoring Ted Prince, chief strategy officer and cofounder of refrigerated intermodal specialist Tiger Cool Express, noted in a June 27 JOC.com commentary that the discussion of reshoring and nearshoring in the June Council of Supply Chain Management Professionals (CSCMP) 2022 State of Logistics Report “was superficial at best. Not all verticals are the same. And there is little change to transportation demand if all that changes is where imports enter the country.” While these themes are often a matter of words versus action, Interos sees impetus from its data. “While this trend is still emerging, [there is] a clear appetite for increased reshoring,” the report said. “Funding and executing these plans will be high on the list of challenges.” Household goods retailer Williams-Sonoma said in an earnings call Wednesday it has already begun lowering its dependence on suppliers in China. “We have significantly reduced the China exposure,” President and CEO Laura Alber said during the call. “We're really always looking for additional high-quality suppliers. And the continuation out of China has happened, but it doesn't mean you're moving it to a place that is free of any other issues. There's a lot of different issues in all these places around the globe, including the domestic market. So, we just have to have more options.” Aside from relocating suppliers, 86 percent of respondents to the Interos survey said they are concerned their supplier base is too concentrated in one region, with almost three-quarters of that group “very concerned” about overconcentration. More than three in five companies said they would increase the number of suppliers they use over the next year, with 70 percent saying they would do so over the next two years. JOC Analyst Cathy Roberson contributed to this report. Follow her on Twitter at: @cmroberson06 . Contact Eric Johnson at eric.johnson@spglobal.com and follow him on Twitter: @LogTechEric .

Logistics Technology News

Supply chain

Disruption forces shippers to weigh supplier nearshoring: study

<div class="phx-topic abstract-wrapper">The bottlenecks are rippling through Asia-Europe supply chains, undermining vessel schedule reliability, disrupting inventory positioning, and ultimately influencing freight rates, according to Drewry.</div>

The bottlenecks are rippling through Asia-Europe supply chains, undermining vessel schedule reliability, disrupting inventory positioning, and ultimately influencing freight rates, according to Drewry.

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<div class="phx-topic">Long Beach, California — A lack of buffer capacity across Europe’s main import gateways lies behind the region’s persistent port congestion, and with no short-term fixes in sight, the bottlenecks should not be regarded as a temporary disruption, industry executives say. The congestion is rippling through Asia-Europe supply chains, undermining vessel schedule reliability, disrupting inventory positioning and ultimately influencing freight rates, according to Chantal McRoberts, director and head of advisory at Drewry Supply Chain Advisors. “Our ports in Europe tend to be in cities and they’ve been there a very long time, which means there’s not enough room for them to expand and build up capacity to accommodate the larger vessels and the larger exchanges of containers,” McRoberts told the Journal of Commerce’s TPM26 conference Tuesday. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177004_0.1.jpg"></img></div>“The system quickly gets overwhelmed, and congestion builds up fast, but then it takes a longer time to dissipate, which is why we see these congestion issues arising,” she added. European congestion rose through 2025 and into 2026, remaining above pre-pandemic 2019 levels amid alliance reshuffling, service changes, vessel redeployment, low river levels, canceled sailings, labor disruptions, and severe weather. While the factors contributing to European port bottlenecks are outside the control of shippers, they can have serious consequences for their supply chains. David Smrkowsky, global head of commodity procurement, logistics and transportation at automotive supplier Kostal Group, said he has built in a buffer on top of the scheduled transit times given by carriers to compensate for the persistent late arrivals. “From China to Europe, 10 days in most cases is enough of a buffer,” he told the conference. “But if we are hit with a rollover or a blank sailing, then we’re already one week out and there’s only three days left, which is very easily consumed by port congestion. Then we start to have problems.” According to data from eeSea, ocean reliability from Asia to North Europe was at 18% in February, the lowest since August 2025. <h3>Fluctuating transit times </h3>Smrkowsky said reliability from ocean carriers was crucial for the automotive supply chain to work effectively. “The worst thing for us is that one week the transit time is 50 days, the next week it is 40, then we are at 60 days,” he said. “These kinds of fluctuations cannot be built into our inventory management, and the cost of capital is far higher than it was five years ago.” Michael Blach, CEO of Eurogate Group, said that while marine terminals in Europe can handle large vessels, late arrivals completely upset the system. “If you have pre-stowed your yards and arranged everything for a 24,000-TEU ship coming in and you have 10,000 moves planned, and then the ship arrives five days late, how do you manage the thousands of containers that have been pre-stored for that vessel that is not coming?,” Blach said. “The 24,000-TEU ships are very effective if the system works, but it has to work at a very high percentage, because when it doesn’t, it is very difficult to find a backup,” he added. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="03aa677a-024e-4b1a-8957-8135ea01976e"></dynamic-object></div>Anders Boenaes, senior managing director of network at Hapag-Lloyd, acknowledged that carriers were partly to blame for the poor service levels but said congestion was a shared responsibility. Boenaes noted that careful planning with terminals below theoretical capacity would smooth out calls, and he urged terminals to set clear obligations for container lines to retain synchronized operations. “It is a question for the terminals to become more demanding of the shipping lines,” he said. “The terminal can choose which shipping lines they are able to harmonize with, because with the 10,000-TEU container moves, it takes very little to get the system out of sync.” Blach said another factor contributing to port congestion was terminals overpromising their handling capabilities to carriers. “If a carrier suddenly wants to call with three main services in a week, we are very honest about what is possible and what is not possible, because our main obligation is to make sure that the terminal continues to operate,” he said. “If you make too many promises and you take too much in, the terminal will be completely choked, and when it takes you two or three months to get back to normal, everybody’s very unhappy,” Blach added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

Long Beach, California — A lack of buffer capacity across Europe’s main import gateways lies behind the region’s persistent port congestion, and with no short-term fixes in sight, the bottlenecks should not be regarded as a temporary disruption, industry executives say. The congestion is rippling through Asia-Europe supply chains, undermining vessel schedule reliability, disrupting inventory positioning and ultimately influencing freight rates, according to Chantal McRoberts, director and head of advisory at Drewry Supply Chain Advisors. “Our ports in Europe tend to be in cities and they’ve been there a very long time, which means there’s not enough room for them to expand and build up capacity to accommodate the larger vessels and the larger exchanges of containers,” McRoberts told the Journal of Commerce’s TPM26 conference Tuesday. “The system quickly gets overwhelmed, and congestion builds up fast, but then it takes a longer time to dissipate, which is why we see these congestion issues arising,” she added. European congestion rose through 2025 and into 2026, remaining above pre-pandemic 2019 levels amid alliance reshuffling, service changes, vessel redeployment, low river levels, canceled sailings, labor disruptions, and severe weather. While the factors contributing to European port bottlenecks are outside the control of shippers, they can have serious consequences for their supply chains. David Smrkowsky, global head of commodity procurement, logistics and transportation at automotive supplier Kostal Group, said he has built in a buffer on top of the scheduled transit times given by carriers to compensate for the persistent late arrivals. “From China to Europe, 10 days in most cases is enough of a buffer,” he told the conference. “But if we are hit with a rollover or a blank sailing, then we’re already one week out and there’s only three days left, which is very easily consumed by port congestion. Then we start to have problems.” According to data from eeSea, ocean reliability from Asia to North Europe was at 18% in February, the lowest since August 2025. Fluctuating transit times Smrkowsky said reliability from ocean carriers was crucial for the automotive supply chain to work effectively. “The worst thing for us is that one week the transit time is 50 days, the next week it is 40, then we are at 60 days,” he said. “These kinds of fluctuations cannot be built into our inventory management, and the cost of capital is far higher than it was five years ago.” Michael Blach, CEO of Eurogate Group, said that while marine terminals in Europe can handle large vessels, late arrivals completely upset the system. “If you have pre-stowed your yards and arranged everything for a 24,000-TEU ship coming in and you have 10,000 moves planned, and then the ship arrives five days late, how do you manage the thousands of containers that have been pre-stored for that vessel that is not coming?,” Blach said. “The 24,000-TEU ships are very effective if the system works, but it has to work at a very high percentage, because when it doesn’t, it is very difficult to find a backup,” he added. Anders Boenaes, senior managing director of network at Hapag-Lloyd, acknowledged that carriers were partly to blame for the poor service levels but said congestion was a shared responsibility. Boenaes noted that careful planning with terminals below theoretical capacity would smooth out calls, and he urged terminals to set clear obligations for container lines to retain synchronized operations. “It is a question for the terminals to become more demanding of the shipping lines,” he said. “The terminal can choose which shipping lines they are able to harmonize with, because with the 10,000-TEU container moves, it takes very little to get the system out of sync.” Blach said another factor contributing to port congestion was terminals overpromising their handling capabilities to carriers. “If a carrier suddenly wants to call with three main services in a week, we are very honest about what is possible and what is not possible, because our main obligation is to make sure that the terminal continues to operate,” he said. “If you make too many promises and you take too much in, the terminal will be completely choked, and when it takes you two or three months to get back to normal, everybody’s very unhappy,” Blach added. Contact Greg Knowler at greg.knowler@spglobal.com .

Port News

Container lines

Asia-Europe

Marine terminals

International ports

Container Shipping News

Maritime

TPM26: Europe’s persistent port congestion won’t be remedied by short-term fixes

<div class="phx-topic abstract-wrapper">Three ocean carriers told the Journal of Commerce they could not commit to contract volume allocations with customers until there was greater clarity on how long the hostilities would last.</div>

Three ocean carriers told the Journal of Commerce they could not commit to contract volume allocations with customers until there was greater clarity on how long the hostilities would last.

<div class="phx-topic">Long Beach, California — Container lines are pausing or slowing annual trans-Pacific service contract negotiations as they assess the impact the war in the Middle East will have on their cost structures and how much functional capacity they can offer. Ocean carriers and US importers had already been <a href="Trans-Pacific carriers, importers slow-walking service contract negotiations | Journal of Commerce">slow-walking negotiations</a> for the 2026–27 service year, but the war — which has tied up between 2% and 10% of global container tonnage, according to various estimates — is preventing them from finalizing agreements. Executives from three ocean carriers who asked not to be identified told the Journal of Commerce they could not commit to contract volume allocations with customers until there was greater clarity on how long the war would last. Their approach isn’t uniform across the industry, however; other carriers say they are ready to finalize contracts despite the uncertainty. Similar to how Houthi attacks that began in late 2023 spurred major carriers to route away from the Red Sea and Suez Canal and divert around southern Africa, the disruption and dislocation of equipment caused by the war in the Middle East will ripple through ocean networks, including the trans-Pacific trade, forwarders and ocean carriers warn. But the impact of the war on the global shipping system will be less pronounced than the Suez diversions, according to container shipping analyst Lars Jensen.<h3>War ‘adds to cost profile’</h3>The war “adds to our cost profile. We have to think about ‘what is our cost to execute this?’” Michael Britton, Maersk’s head of ocean products for North America, told the Journal of Commerce Wednesday. “There’s a global effect pretty immediately, which is the impact on [bunker] fuel price.” While high oil prices will be reflected in a bunker adjustment factor — albeit with a lag of a couple months — the impact of the war on Maersk’s global network is unclear, said Britton. The war, now in its fifth day, has expanded geographically, stretching as far west as Cyprus, where an Iranian drone was shot down on Monday. “The longer it goes, the wider it becomes, because we end up with ships which are not coming back to their original loading ports, and then we try to plug the holes with additional ships,” Britton said. “Part of it will come down to whether we continue to accept bookings.” The timeline for contract negotiations is also being held up because some of the top retailers, including Walmart, have yet to finalize contracts before the Journal of Commerce’s TPM Conference in Long Beach, as they typically do, according to two carrier executives. Those initial contracts then set the floor for contract rates, with the remaining large, midsize and smaller importers signing for somewhat higher rates in March and through April. Most contracts for the new service year begin on May 1. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Long Beach, California — Container lines are pausing or slowing annual trans-Pacific service contract negotiations as they assess the impact the war in the Middle East will have on their cost structures and how much functional capacity they can offer. Ocean carriers and US importers had already been slow-walking negotiations for the 2026–27 service year, but the war — which has tied up between 2% and 10% of global container tonnage, according to various estimates — is preventing them from finalizing agreements. Executives from three ocean carriers who asked not to be identified told the Journal of Commerce they could not commit to contract volume allocations with customers until there was greater clarity on how long the war would last. Their approach isn’t uniform across the industry, however; other carriers say they are ready to finalize contracts despite the uncertainty. Similar to how Houthi attacks that began in late 2023 spurred major carriers to route away from the Red Sea and Suez Canal and divert around southern Africa, the disruption and dislocation of equipment caused by the war in the Middle East will ripple through ocean networks, including the trans-Pacific trade, forwarders and ocean carriers warn. But the impact of the war on the global shipping system will be less pronounced than the Suez diversions, according to container shipping analyst Lars Jensen. War ‘adds to cost profile’ The war “adds to our cost profile. We have to think about ‘what is our cost to execute this?’” Michael Britton, Maersk’s head of ocean products for North America, told the Journal of Commerce Wednesday. “There’s a global effect pretty immediately, which is the impact on [bunker] fuel price.” While high oil prices will be reflected in a bunker adjustment factor — albeit with a lag of a couple months — the impact of the war on Maersk’s global network is unclear, said Britton. The war, now in its fifth day, has expanded geographically, stretching as far west as Cyprus, where an Iranian drone was shot down on Monday. “The longer it goes, the wider it becomes, because we end up with ships which are not coming back to their original loading ports, and then we try to plug the holes with additional ships,” Britton said. “Part of it will come down to whether we continue to accept bookings.” The timeline for contract negotiations is also being held up because some of the top retailers, including Walmart, have yet to finalize contracts before the Journal of Commerce’s TPM Conference in Long Beach, as they typically do, according to two carrier executives. Those initial contracts then set the floor for contract rates, with the remaining large, midsize and smaller importers signing for somewhat higher rates in March and through April. Most contracts for the new service year begin on May 1. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Trans-Pacific

Middle East war slows trans-Pacific service contract talks further

<div class="phx-topic abstract-wrapper">While resuming the movement of vessels in the war zone is important, the shipping group says the president’s offer needs clarification. </div>

While resuming the movement of vessels in the war zone is important, the shipping group says the president’s offer needs clarification.

<div class="phx-topic">Shipping association BIMCO is taking a wait-and-see approach to comments made by US President Donald Trump indicating the US would offer political risk insurance to all maritime trade in the Persian Gulf, where shipping has come to a standstill after the weekend attacks launched by the US and Israel against Iran. The hostilities are now in their fifth day, with Iranian retaliation against other Gulf countries expanding the war across the whole of the region. With oil prices on the rise amid Iran’s chokehold on the narrow Strait of Hormuz, Trump on Tuesday said he directed the US Development Finance Corporation to provide “political risk insurance and guarantees for the financial security of ALL maritime trade, especially energy, traveling through the Gulf.” The Truth Social post from Trump said the insurance would be available “at a very reasonable price ... to all shipping lines.” But Jakob Larsen, BIMCO’s chief safety and security officer, expressed caution Wednesday, saying the proposal from Trump “has yet to be explained in full.” “Depending on the details of the proposal, it might help tip the risk/reward ratio and stimulate more shipowners to resume operations in the high-threat area,” Larsen said in a statement. He also said Trump’s offer for the US Navy to escort oil tankers through the Strait of Hormuz “sounds interesting,” but needed clarification. “Naval escorts would help reduce the threat for the ships being protected,” Larsen said. “That said, providing protection for all tankers operating in areas currently threatened by Iran is unrealistic, as this would require a very high number of warships and other military assets.” Although Trump’s offer for naval escorts did not mention container shipping, supply chains in the region <a href="https://www.joc.com/article/carriers-pause-india-middle-east-cargo-bookings-amid-persian-gulf-port-chaos-6179223">have come to a standstill</a> following the suspension of all services. “At some future point, if the Iranian threat has been degraded significantly, the relative effect of naval escorts will improve,” Larsen said. “This might push the security risk below the risk acceptance level of some shipowners and cause some ships to resume operations in the high-threat area.” The escalation of hostilities in the region is expected to push maritime risk insurance premiums through the roof, Dylan Mortimer from UK-based insurance risk adviser Marsh <a href="https://www.joc.com/article/shipping-avoids-middle-east-region-after-us-israel-begin-strikes-on-iran-6177596">said Sunday</a>, at the outset of the US and Israeli attacks. Contact Kevin Saville at <a href="mailto:kevin.saville2@spglobal.com">kevin.saville2@spglobal.com</a>. </div>

Shipping association BIMCO is taking a wait-and-see approach to comments made by US President Donald Trump indicating the US would offer political risk insurance to all maritime trade in the Persian Gulf, where shipping has come to a standstill after the weekend attacks launched by the US and Israel against Iran. The hostilities are now in their fifth day, with Iranian retaliation against other Gulf countries expanding the war across the whole of the region. With oil prices on the rise amid Iran’s chokehold on the narrow Strait of Hormuz, Trump on Tuesday said he directed the US Development Finance Corporation to provide “political risk insurance and guarantees for the financial security of ALL maritime trade, especially energy, traveling through the Gulf.” The Truth Social post from Trump said the insurance would be available “at a very reasonable price ... to all shipping lines.” But Jakob Larsen, BIMCO’s chief safety and security officer, expressed caution Wednesday, saying the proposal from Trump “has yet to be explained in full.” “Depending on the details of the proposal, it might help tip the risk/reward ratio and stimulate more shipowners to resume operations in the high-threat area,” Larsen said in a statement. He also said Trump’s offer for the US Navy to escort oil tankers through the Strait of Hormuz “sounds interesting,” but needed clarification. “Naval escorts would help reduce the threat for the ships being protected,” Larsen said. “That said, providing protection for all tankers operating in areas currently threatened by Iran is unrealistic, as this would require a very high number of warships and other military assets.” Although Trump’s offer for naval escorts did not mention container shipping, supply chains in the region have come to a standstill following the suspension of all services. “At some future point, if the Iranian threat has been degraded significantly, the relative effect of naval escorts will improve,” Larsen said. “This might push the security risk below the risk acceptance level of some shipowners and cause some ships to resume operations in the high-threat area.” The escalation of hostilities in the region is expected to push maritime risk insurance premiums through the roof, Dylan Mortimer from UK-based insurance risk adviser Marsh said Sunday , at the outset of the US and Israeli attacks. Contact Kevin Saville at kevin.saville2@spglobal.com .

BIMCO expresses caution over Trump’s Persian Gulf shipping insurance offer

<div class="phx-topic abstract-wrapper">The Trump administration’s move against non-English-speaking drivers and non-domiciled commercial driver’s license holders could hit the drayage sector, but only after it trickles down from other parts of the trucking industry, experts say.</div>

The Trump administration’s move against non-English-speaking drivers and non-domiciled commercial driver’s license holders could hit the drayage sector, but only after it trickles down from other parts of the trucking industry, experts say.

<div class="phx-topic">Long Beach, California —Transportation leaders say port drayage truck drivers are unlikely to see an immediate impact on capacity should a recently introduced bill in Congress that would remove potentially thousands of drivers from US roads who may be operating illegally become law. Three drayage experts discussed the possible ramifications of the proposed Delilah’s Law and the Trump administration’s crackdown on non-English-speaking drivers and non-domiciled commercial driver’s license (CDL) holders during a panel discussion at the Journal of Commerce’s TPM26 conference on Tuesday. Panelists acknowledged the bill in Congress could impact other segments of drayage, including rail drayage, and that it could tighten overall capacity in the trucking industry if more drivers are disqualified from driving because of language-related or other safety issues. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177004_0.1.jpg"></img></div>Supporters of the bill say it would close loopholes in the CDL process, ensuring that only citizens or legally authorized individuals can operate commercial vehicles. “I think you would see an impact on the rail, the rail area first, certainly like Texas, California, maybe New York, New Jersey, Florida,” said Brian Kobza, chief commercial officer with IMC Logistics. Kobza added that the combination of the bill being introduced and the current US Department of Transportation crackdown against drivers it believes are operating illegally or in the country illegally could remove more capacity and ultimately increase rates. “That’s the overall macro, in fact, that we’re positively looking for, [changing] that supply and demand, hopefully raise the rates, and let’s all make some money again,” he said, With regards to the US Department of Transportation crackdown against non-domiciled CDL holders, port drayage trucking companies and drivers could be impacted, but they said the initial impact will likely be regionally focused and not national in its scope and not specifically targeting drayage trucking companies. “I think the largest impact would probably be on the state of California,” said Paul Brashier, vice president of global supply chain at ITS Logistics. “There are certain states that are doing their due diligence on non-[domiciled] and pulling them out. There are certain states that aren’t, California being one of them.” “I don’t think we’re going to have a huge shortage in the very near term of any driver,” said Kobza. “I don’t see it affecting the drayage carriers in the industry.” He noted the truckload and less-than-truckload sectors are feeling the enforcement crackdown to a larger extent, while drayage could eventually be impacted later in the enforcement period. <h3>Hoping for bump in rates </h3>With regards to the economic performance of the US drayage industry in 2026, none are forecasting a spectacular year. The three panelists believe rates will creep up this year, in part brought on by a slight increase in consumer demand. “At the macro, it’s going to feel just tepid,” said Reed Kidd, CEO of EDRAY Collaborative Port Logistics. “And then, but within each of the verticals and ports and everything else underneath it, it’s going to be, I think, wildly different for different sectors of the business, and those groups that are winning are going to need to figure out how to do that in the market.” Kobza said one thing that would jump start the drayage industry is lower mortgage interest rates, and he cited the recent drop in 30-year fixed rates, which have fallen below 6% for those with good credit. “I’m saying one percent is good growth for 2025 that was without any new housing starts, nothing good in the housing sector at all,” he said. “It was all consumer demand.” Kobza pointed out that housing serves as a multiplier for the economy and trucking. “If you have just a blip up in housing in that market, you’re going to see a nice surge of business for furniture, for the equipment, for anything that’s to do with housing,” he said. “So I think that that’s the equilibrium that might push it up to a positive here [for drayage].” Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>.</div>

Long Beach, California —Transportation leaders say port drayage truck drivers are unlikely to see an immediate impact on capacity should a recently introduced bill in Congress that would remove potentially thousands of drivers from US roads who may be operating illegally become law. Three drayage experts discussed the possible ramifications of the proposed Delilah’s Law and the Trump administration’s crackdown on non-English-speaking drivers and non-domiciled commercial driver’s license (CDL) holders during a panel discussion at the Journal of Commerce’s TPM26 conference on Tuesday. Panelists acknowledged the bill in Congress could impact other segments of drayage, including rail drayage, and that it could tighten overall capacity in the trucking industry if more drivers are disqualified from driving because of language-related or other safety issues. Supporters of the bill say it would close loopholes in the CDL process, ensuring that only citizens or legally authorized individuals can operate commercial vehicles. “I think you would see an impact on the rail, the rail area first, certainly like Texas, California, maybe New York, New Jersey, Florida,” said Brian Kobza, chief commercial officer with IMC Logistics. Kobza added that the combination of the bill being introduced and the current US Department of Transportation crackdown against drivers it believes are operating illegally or in the country illegally could remove more capacity and ultimately increase rates. “That’s the overall macro, in fact, that we’re positively looking for, [changing] that supply and demand, hopefully raise the rates, and let’s all make some money again,” he said, With regards to the US Department of Transportation crackdown against non-domiciled CDL holders, port drayage trucking companies and drivers could be impacted, but they said the initial impact will likely be regionally focused and not national in its scope and not specifically targeting drayage trucking companies. “I think the largest impact would probably be on the state of California,” said Paul Brashier, vice president of global supply chain at ITS Logistics. “There are certain states that are doing their due diligence on non-[domiciled] and pulling them out. There are certain states that aren’t, California being one of them.” “I don’t think we’re going to have a huge shortage in the very near term of any driver,” said Kobza. “I don’t see it affecting the drayage carriers in the industry.” He noted the truckload and less-than-truckload sectors are feeling the enforcement crackdown to a larger extent, while drayage could eventually be impacted later in the enforcement period. Hoping for bump in rates With regards to the economic performance of the US drayage industry in 2026, none are forecasting a spectacular year. The three panelists believe rates will creep up this year, in part brought on by a slight increase in consumer demand. “At the macro, it’s going to feel just tepid,” said Reed Kidd, CEO of EDRAY Collaborative Port Logistics. “And then, but within each of the verticals and ports and everything else underneath it, it’s going to be, I think, wildly different for different sectors of the business, and those groups that are winning are going to need to figure out how to do that in the market.” Kobza said one thing that would jump start the drayage industry is lower mortgage interest rates, and he cited the recent drop in 30-year fixed rates, which have fallen below 6% for those with good credit. “I’m saying one percent is good growth for 2025 that was without any new housing starts, nothing good in the housing sector at all,” he said. “It was all consumer demand.” Kobza pointed out that housing serves as a multiplier for the economy and trucking. “If you have just a blip up in housing in that market, you’re going to see a nice surge of business for furniture, for the equipment, for anything that’s to do with housing,” he said. “So I think that that’s the equilibrium that might push it up to a positive here [for drayage].” Contact Dan Ronan at contactdanronan@gmail.com .

Trucking News

Drayage

Surface

TPM26: US trucking crackdown likely to have delayed impact on drayage sector

<div class="phx-topic abstract-wrapper">Those who would be affected by the proposed $85 billion transaction either directly or indirectly had plenty to say about the matter during the first TPM26 conference since the deal was announced. </div>

Those who would be affected by the proposed $85 billion transaction either directly or indirectly had plenty to say about the matter during the first TPM26 conference since the deal was announced.

<div class="phx-topic">Long Beach, California — Union Pacific Railroad’s (UP’s) proposed $85 billion acquisition of Norfolk Southern Railway (NS) is being hotly debated this week at TPM26, specifically the impact the deal could have on beneficial cargo owners (BCOs). Supporters say combining the two railroads would create operational efficiencies and dramatically reduce bottlenecks in gateway cities such as Chicago, Kansas City and Memphis. Opponents counter that many of those efficiencies could be achieved without a major consolidation that would leave BCOs with fewer choices and increase the risk of service disruptions. “We have railroads on the western side and the eastern side of the country, and they can’t connect seamlessly and easily, which is an anomaly compared with most other countries,” said Jeremy Nixon, CEO of Ocean Network Express (ONE). “Anything that can join up and move the cargo through smoother, quicker, and take cost out is a benefit.” <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6177004_0.1.jpg"></img></div>ONE is a major customer of Union Pacific and has filed a letter of support for the deal with federal regulators. Handoffs between railroads in US gateway cities often take 12 to 24 hours. For example, if a BCO moves a container from the Port of Los Angeles to Cincinnati, a western-based railroad transports the cargo to Chicago. The train is then broken apart and the containers are transferred to eastern rail partners, often one by one by a trucker performing a cross-town dray move. Finally, the eastern railroad builds a new train for the Chicago to Cincinnati leg, loads containers on board, and departs. Under a merged Union Pacific-Norfolk Southern system, proponents say the process could be simplified. A train arriving in Chicago would only require a crew change before continuing east, potentially reducing the process to less than an hour. Shippers in parts of Michigan, Ohio and Kentucky could see some of the largest operational changes with a seamless handoff in Chicago. “We really want to hear the BCOs to find out where they want to go,” Kenny Rocker, UP’s executive vice president of marketing and sales, told TPM26 on Tuesday. “Where do you want to go? Do you want to go to Cincinnati? Do you want to go to Toledo? Do we have those services? We’re looking at it from that perspective, not trying to push something that’s not there.” <h3>Stiff competition in the way </h3>The UP-NS merger proposal still faces a lengthy regulatory process. The US Surface Transportation Board (STB) <a href="https://www.joc.com/article/stb-rejects-up-ns-merger-application-as-incomplete-6154074">deemed Union Pacific’s initial application “incomplete” in January</a>. UP plans to submit a revised application by April 30. If regulators determine that the second filing is “complete,” it would trigger a multi-stage review process that includes public hearings and testimony. A final decision would likely come in 2027. Major rail competitors currently oppose the deal, including BNSF Railway, Canadian Pacific Kansas City, Canadian National and CSX Transportation. Their primary concern is that a combined railroad would create an entity so large that a service disruption could ripple across the broader North American network. Opponents also argue that many of the operational improvements highlighted by supporters could be achieved through stronger cooperation between railroads. Jon Gabriel, BNSF’s group vice president of consumer products, argued that if Union Pacific ultimately spends $85 billion to acquire Norfolk Southern, the combined railroad would face pressure to generate returns for shareholders while servicing acquisition-related debt, potentially leading to higher rates for shippers. “You’re going to have less optionality. So, is it necessary to pay more to get something that could be accomplished without the premium?” Gabriel told TPM26 Tuesday. BNSF and Norfolk Southern <a href="https://www.joc.com/article/bnsf-norfolk-southern-unveil-faster-inland-service-from-pacific-northwest-5976500">launched a joint service</a> last year between ports in Seattle and Tacoma and the Ohio Valley, with only a quick crew change in Chicago. Gabriel said that proves the same benefits can be achieved through cooperation. Still, Gabriel acknowledged that the merger debate itself has brought attention to congestion in gateway cities, an issue the industry has long struggled to address. <h3>West Coast versus East Coast ports </h3>Another question raised during TPM26 is whether East Coast ports could lose traffic if the UP-NS merger goes forward. “We have a pretty competitive port structure that allows for lots of different service options in different ports,” Carl Bentzel, president of the National Association of Waterfront Employers, said Tuesday. “There is a legitimate and profound concern on foreclosure of business opportunity and long-term consolidation in ports.” Mike Steenhoek, executive director of the Soy Transportation Coalition, said smaller East Coast ports could face pressure if a combined railroad shifts investment and service priorities. “The East Coast ports are all profitable, but some are more profitable than others, and if you are a company that’s allocating scarce resources to its optimum effect, you’re going to prioritize certain ports at the expense of others,” he said Tuesday. UP’s Rocker countered that Norfolk Southern has performed well in short-haul East Coast inland routes, a strength he said would remain after the merger. “I think they do a great job, and this merger won’t disrupt any of that,” he said. “We’re not going in saying we want to lose containerized business; that’s not a part of the mindset. The mindset will be to retain and grow as much as we can.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Long Beach, California — Union Pacific Railroad’s (UP’s) proposed $85 billion acquisition of Norfolk Southern Railway (NS) is being hotly debated this week at TPM26, specifically the impact the deal could have on beneficial cargo owners (BCOs). Supporters say combining the two railroads would create operational efficiencies and dramatically reduce bottlenecks in gateway cities such as Chicago, Kansas City and Memphis. Opponents counter that many of those efficiencies could be achieved without a major consolidation that would leave BCOs with fewer choices and increase the risk of service disruptions. “We have railroads on the western side and the eastern side of the country, and they can’t connect seamlessly and easily, which is an anomaly compared with most other countries,” said Jeremy Nixon, CEO of Ocean Network Express (ONE). “Anything that can join up and move the cargo through smoother, quicker, and take cost out is a benefit.” ONE is a major customer of Union Pacific and has filed a letter of support for the deal with federal regulators. Handoffs between railroads in US gateway cities often take 12 to 24 hours. For example, if a BCO moves a container from the Port of Los Angeles to Cincinnati, a western-based railroad transports the cargo to Chicago. The train is then broken apart and the containers are transferred to eastern rail partners, often one by one by a trucker performing a cross-town dray move. Finally, the eastern railroad builds a new train for the Chicago to Cincinnati leg, loads containers on board, and departs. Under a merged Union Pacific-Norfolk Southern system, proponents say the process could be simplified. A train arriving in Chicago would only require a crew change before continuing east, potentially reducing the process to less than an hour. Shippers in parts of Michigan, Ohio and Kentucky could see some of the largest operational changes with a seamless handoff in Chicago. “We really want to hear the BCOs to find out where they want to go,” Kenny Rocker, UP’s executive vice president of marketing and sales, told TPM26 on Tuesday. “Where do you want to go? Do you want to go to Cincinnati? Do you want to go to Toledo? Do we have those services? We’re looking at it from that perspective, not trying to push something that’s not there.” Stiff competition in the way The UP-NS merger proposal still faces a lengthy regulatory process. The US Surface Transportation Board (STB) deemed Union Pacific’s initial application “incomplete” in January . UP plans to submit a revised application by April 30. If regulators determine that the second filing is “complete,” it would trigger a multi-stage review process that includes public hearings and testimony. A final decision would likely come in 2027. Major rail competitors currently oppose the deal, including BNSF Railway, Canadian Pacific Kansas City, Canadian National and CSX Transportation. Their primary concern is that a combined railroad would create an entity so large that a service disruption could ripple across the broader North American network. Opponents also argue that many of the operational improvements highlighted by supporters could be achieved through stronger cooperation between railroads. Jon Gabriel, BNSF’s group vice president of consumer products, argued that if Union Pacific ultimately spends $85 billion to acquire Norfolk Southern, the combined railroad would face pressure to generate returns for shareholders while servicing acquisition-related debt, potentially leading to higher rates for shippers. “You’re going to have less optionality. So, is it necessary to pay more to get something that could be accomplished without the premium?” Gabriel told TPM26 Tuesday. BNSF and Norfolk Southern launched a joint service last year between ports in Seattle and Tacoma and the Ohio Valley, with only a quick crew change in Chicago. Gabriel said that proves the same benefits can be achieved through cooperation. Still, Gabriel acknowledged that the merger debate itself has brought attention to congestion in gateway cities, an issue the industry has long struggled to address. West Coast versus East Coast ports Another question raised during TPM26 is whether East Coast ports could lose traffic if the UP-NS merger goes forward. “We have a pretty competitive port structure that allows for lots of different service options in different ports,” Carl Bentzel, president of the National Association of Waterfront Employers, said Tuesday. “There is a legitimate and profound concern on foreclosure of business opportunity and long-term consolidation in ports.” Mike Steenhoek, executive director of the Soy Transportation Coalition, said smaller East Coast ports could face pressure if a combined railroad shifts investment and service priorities. “The East Coast ports are all profitable, but some are more profitable than others, and if you are a company that’s allocating scarce resources to its optimum effect, you’re going to prioritize certain ports at the expense of others,” he said Tuesday. UP’s Rocker countered that Norfolk Southern has performed well in short-haul East Coast inland routes, a strength he said would remain after the merger. “I think they do a great job, and this merger won’t disrupt any of that,” he said. “We’re not going in saying we want to lose containerized business; that’s not a part of the mindset. The mindset will be to retain and grow as much as we can.” Contact Ari Ashe at ari.ashe@spglobal.com .

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