<div class="phx-topic abstract-wrapper">As container lines pull back on inland point intermodal (IPI), US importers are rethinking their landside delivery plans and containerized freight is moving further inland before being deconsolidated.</div>

As container lines pull back on inland point intermodal (IPI), US importers are rethinking their landside delivery plans and containerized freight is moving further inland before being deconsolidated.

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<div>US importers are being forced to take greater control of landside delivery, whether by using expedited full truckload services or by funneling ocean containers through transloaded facilities to spit out freight in 53-foot domestic containers or trailers, or even by tapping less-than-truckload (LTL) capacity.Shippers’ embrace of new inland distribution points during the COVID-19 pandemic, such as Salt Lake City, Las Vegas, and Phoenix, has further redrawn the inland delivery landscape. In many cases, the point of deconsolidation for containerized freight is shifting further inland from the coasts.Container lines generally are pulling back how much inland point intermodal (IPI) container exposure...

US importers are being forced to take greater control of landside delivery, whether by using expedited full truckload services or by funneling ocean containers through transloaded facilities to spit out freight in 53-foot domestic containers or trailers, or even by tapping less-than-truckload (LTL) capacity. Shippers’ embrace of new inland distribution points during the COVID-19 pandemic, such as Salt Lake City, Las Vegas, and Phoenix, has further redrawn the inland delivery landscape. In many cases, the point of deconsolidation for containerized freight is shifting further inland from the coasts. Container lines generally are pulling back how much inland point intermodal (IPI) container exposure they will guarantee, putting the onus on forwarders and shippers to find alternative capacity. That’s contributed to a scramble for extremely tight and high-priced inland distribution capacity. The number of IPI containers moving intact out of California, Nevada, and Arizona fell 30 percent year over year in the fourth quarter of 2021 , according to data from the Intermodal Association of North America (IANA). IPI volume out of the Pacific Northwest dropped 28 percent year over year in the same period. In the current round of trans-Pacific service contract talks, ocean carriers have been less willing to provide intermodal rail service to IPI points that don’t work for their networks. Surface transportation providers are pushing back in a similar way against freight that doesn’t suit their networks. As a result, US importers of Asian-made goods say they’re seeing landside costs within service contracts rise by at least 25 percent, as ocean carriers consolidate international rail flows through larger ports. Container lines don’t want boxes stranded at inland rail terminals and shipper receiving facilities for weeks or months; they want to get those empties back to Asia as quickly as possible. But the transformation of the landside transportation landscape cannot be attributed entirely to the pullback in IPI volume. The ultimate drivers of these changes are evolving consumer behavior and the rapid growth of e-commerce. Still, the lack of IPI capacity has many importers rewriting their playbooks on how to get goods from the ports to warehouses and distribution and fulfillment centers, retail stores, manufacturing plants, and homes. As the spring shipping peak approaches, shippers are finding capacity is as tight as ever — in some cases tighter. “We’re dealing with consistent supply chain constraints,” Holly Pearce, director of logistics for battery manufacturer C&D Trojan, said in an interview. “I’ve had to do a lot more LTL and expedited to keep my plants running. Many shippers are getting into different modes than they had to in the past.” Multifaceted flows Importers aren’t just switching modes or diversifying. They’re rethinking how they ship from overseas to the US, and when and where they inject their international freight into domestic supply chains. Some, including C&D Trojan, have leaped over ports by using international air cargo and LTL as the final mile. That’s the type of change Maersk is trying to facilitate through its February purchase of Pilot Freight Services for $1.6 billion, which when completed will give the container line a presence in US truckload and LTL as well as last-mile services. An integrated approach to landside delivery is increasingly advantageous. “We do a lot of drayage going to transload facilities, and now with Pilot and the middle mile, we can consolidate the international and domestic flows,” said Narin Phol, regional managing director of Maersk North America. “Our ability to combine both flows takes waste out of the supply chain.” According to Ken Kellaway, CEO of drayage operator and third-party logistics provider (3PL) RoadOne IntermodaLogistics, shippers increasingly want an integrated view of that supply chain. “Our customers include large multifaceted importers, and they need drayage, warehousing, transloading, and regional truckload all tied together,” Kellaway told JOC.com. In addition to those services, multifaceted importers also need LTL and dedicated trucking options. With truckload and intermodal capacity tight, and space limited for warehousing and transloading, shippers are asking LTL carriers for help in getting freight into inland distribution networks faster. “Two or three years ago, we didn’t see ourselves at the ports, but we’re there now,” Geoffrey Muessig, chief marketing officer for regional LTL carrier Pitt Ohio, said in an interview. “Our LTL customers tell us about problems at ports where the warehouses are overflowing, and they’re asking us for solutions.” In this pandemic-disrupted market, shippers will take capacity where they find it, and they’re willing to pay a premium. They may find more, and pay somewhat less, if they are able to change internal processes to help transportation providers free up more capacity. That includes adjusting order frequency and volumes. “As a shipper, I definitely need to connect with my freight providers and ask where I can help them, where they need more freight to round out their lanes,” said Pearce. Offering carriers freight that fits their networks will be crucial to securing reliable inland distribution capacity in 2022. Importers who spoke with JOC.com don’t expect much change in the international freight markets this year, nor do logistics managers responsible for purchasing domestic transportation. Last year’s increases in contract transportation rates are this year’s launch pad for fresh rate hikes, although not as high as last year’s. Shippers tell JOC.com that domestic intermodal contracts are rising more than 10 percent across the US, while truckload contracts are rising in the upper-single-digit range. LTL trucking companies are pushing for low-double-digit percentage rate increases in contract negotiations, according to LTL shippers. High trucking spot rates may moderate as more contracts with substantial price increases take effect, drawing spot truckload capacity back to the contract trucking market. However, that hasn’t happened yet, and it’s not clear when — or whether — continuing shortages of labor and equipment will ease. Beating port congestion Keeping freight moving, shelves stocked, and plants running will continue to take precedence over price, as importers grapple with supply chain disruptions from winter storms to shortages of labor and raw materials and even political protests such as those that obstructed key freight lanes across the US–Canada border in February. The initial challenge, however, is simply getting freight out of congested port terminals. Ports are unlikely to see much relief in clearing cargo backlogs, even as the annualized growth in US imports slows to 1.5 percent in the first half, according to the Global Port Tracker report from Hackett Associates and the National Retail Federation. “A shortage of equipment , worker availability, and storage space at distribution centers and warehouses across the country remains problematic, as does the export of empty containers back to Asia ,” Ben Hackett, founder of Hackett Associates, said in the February Global Port Tracker. The Los Angeles–Long Beach port complex, which handles about 50 percent of total US containerized imports from Asia, according to PIERS, a sister product of JOC.com within IHS Markit, has experienced unprecedented congestion during the rebound of the US economy that followed early COVID-19 lockdowns in the spring of 2020. Key indicators suggest congestion has stabilized, although the largest US port complex is nowhere near the state of cargo fluidity it was prior to the pandemic. The average truck turn time at Los Angeles and Long Beach terminals was 92 minutes in January, up from 62 minutes in July 2020, according to the Harbor Trucking Association. The average dwell time on Los Angeles–Long Beach docks for containers that move by truck to local destinations reached 7.7 days in December. That was down from 8.4 days in November but still nearly double the pre-pandemic average of less than four days, according to data from the Pacific Merchant Shipping Association. Terminal operators in Los Angeles–Long Beach said IPI rail volumes have been down more than 25 percent since last summer, when the western railroads began to “meter” intermodal service from the West Coast to relieve congestion at intermodal hubs in the interior, especially Chicago. Those terminal operators are urging shipping lines to book more IPI shipments because each train that leaves an on-dock rail yard eliminates upwards of 250 gate moves that would occur if the containers were moved by truck to transloading warehouses in Southern California. Chassis “street dwell” times in the Los Angeles–Long Beach area have averaged between 8.8 and 9.2 days for the past year, which is more than double the normal dwell of less than four days , according to the Pool of Pools website, managed by the three largest intermodal equipment providers. The street dwell may be one reason shipping lines are skittish about offering too much IPI through carrier haulage agreements. If containers incur rail storage, a form of demurrage, because of a lack of chassis, then the shipping line may be responsible for paying those fees to the Class I railroad. Domestic intermodal options Transloading to domestic intermodal may become a better option for those importers in early 2022, as railroads have canceled surcharges and intermodal marketing companies (IMCs) including Hub Group, J.B. Hunt Transport Services, and Schneider National have ordered thousands of 53-foot containers. And large IMCs aren’t the only ones adding containers; LTL providers such as ArcBest, Estes Express Lines, and Yellow are also increasing their equipment fleets. That itself is a sign that transportation providers known primarily for domestic point-to-point service are crossing deeper into international business as their customers seek capacity. But importers are demanding greater speed from transportation providers as they try to make up for time lost on the ocean leg. That’s pushing more freight that would have been shipped inland by rail into tractor-trailers, even if there are savings available putting cargo on trains in 53-foot containers. On the East Coast, congestion that hit Savannah late last year appears to have shifted to Charleston, South Carolina, and Norfolk, Virginia. The South Carolina Ports Authority (SC Ports) believes it will take until mid-March to move enough containers from its terminals to work down its queue of vessels. SC Ports has been urging importers to pick up containers quickly, rather than let them sit for weeks on the terminal. CEO Jim Newsome said there were 7,400 containers in Charleston that had been on terminal for more than 15 days as of Feb. 10, while a normal number would be 1,000 containers. A shift in drayage capacity may complicate efforts to move containers faster in the Southeast. The number of new drayage providers operating at Charleston and Savannah jumped from July through December last year, with 305 new carriers in Savannah alone, according to carrier directory Drayage.com. These are mainly one-truck operators that have left larger companies to pursue high spot market rates, according to Jason Hilsenbeck, president of freight marketplace LoadMatch.com and Drayage.com, which added 1,228 new drayage operator listings in 2021. “It’s been overwhelming,” Hilsenbeck said. The effect is two-pronged. First, large drayage companies are losing drivers while customers are asking them to haul more loads. Second, importers who get shortchanged must go to the spot market and pay significantly more for drayage moves. The result may be a steep increase in contract drayage rates. Transloading to truck Frustrated shippers are turning from IPI and transloaded domestic intermodal to over-the-road truckload and LTL trucking, but they’re hitting well-publicized capacity and pricing constraints in those sectors as well. That’s making it difficult to tap overflow capacity as shippers have in the past. The truckload sector is undergoing a shift of capacity in the form of truck drivers. Those drivers are leaving larger carriers to work for smaller companies or strike out on their own, a trend that has accelerated during the COVID-19 pandemic as truckers sought to capitalize on spot truckload rates that soared to new records. The national average dry van spot rate tracked by DAT Freight & Analytics rose from $2.84 per mile in September to $3.00 per mile in December. January and February used to see some rate deflation, but in 2022, the national dry van average rate rose to $3.11 per mile in January and $3.13 per mile in February. Spot market truckload rates from major West and East coast ports were particularly strong late last year. From October through December, the average monthly spot rate from seven West Coast ports to Chicago rose from $2.88 to $3.25 per mile, according to DAT, outpacing the national average. Average monthly spot rates from nine East Coast ports rose from $2.21 to $2.27 per mile in the same period but then jumped to $2.44 in early January. The average dry van spot rate from Elizabeth, New Jersey, rose from $2.29 per mile in December to $2.73 per mile in January, a sign of tightening capacity. Larger, high-volume shippers have difficulty connecting with those smaller truckload carriers, such as their smaller drayage counterparts. Many shippers are reportedly asking LTL carriers for help, betting they have more capacity to spare. But as shipping demand rises, LTL is hitting capacity limits. “Weather, impacts from the COVID-19 pandemic, and labor challenges continue to disrupt the LTL network across the US,” 3PL C.H. Robinson Worldwide said in a Feb. 10 client advisory. “Multiple LTL carriers are now implementing freight embargoes at various locations.” LTL networks were hit hard by the severe winter storm that struck about two-thirds of the US in early February, dislocating freight and disrupting linehaul shipping schedules. Unless shippers are already a carrier’s customers, they’re unlikely to get access to that carrier’s capacity anytime soon. Pearce said she is hearing a consistent message from C&D Trojan’s LTL providers. “They’re saying ‘no’ to freight that doesn’t make sense for them,” either in terms of return or their freight mix. A more disciplined approach to network management is evolving from LTL pricing discipline. Yet, customers are drawing LTL providers closer to ports. “We absolutely have customers that are begging us to pick up loads at the ports and expedite them,” said Webb Estes, vice president of process improvement at Estes Express Lines, the fourth-largest US LTL operator by annual revenue in 2020 . Estes Express plans to replace a 25-door facility in Savannah, Georgia, with a 125-door terminal this spring. The Richmond, Virginia-based carrier also handles deconsolidated freight from the ports of Norfolk, Virginia, and Charleston and is building a terminal in Southern California to expand capacity. “We see no shortage of freight coming into the US in the coming years,” Estes said. The result will be more distribution options for shippers. New options will be needed as fluctuations in capacity and demand continue, driving containerized freight into new transportation channels. And there will be a need for multiple options. Although Los Angeles–Long Beach remains the dominant US port of entry, importers are sending more freight to East and Gulf Coast ports. That may partially account for the drop in IPI volumes off the West Coast, according to Lawrence Gross, president of Gross Transportation Consulting and a JOC analyst. Transloading is on the rise, but not at a fast enough pace to account for all the missing IPI traffic, according to Gross’s latest analysis. Carriers such as RoadOne IntermodaLogistics are making substantial investments in transloading facilities, but space is hard to find. “We’re looking at doing more of it further inland, as the cost of land in Southern California is so high,” Kellaway said. “The incremental additional cost of trucking the container further inland isn’t that big. It’s the gate time at the port terminal that’s killing us.” Contact William B. Cassidy at bill.cassidy@ihsmarkit.com and follow him on Twitter: @willbcassidy . Contact Ari Ashe at ari.ashe@ihsmarkit.com and follow him on Twitter: @arijashe .Contact Bill Mongelluzzo at bill.mongelluzzo@ihsmarkit.com and follow him on Twitter: @billmongelluzzo .

Rail News

Disruption forcing US importers to take greater control of landside logistics

<div class="phx-topic abstract-wrapper">Just days after last week’s storm shut terminals and disrupted shipping schedules, Maersk warned that weather in the region has “deteriorated beyond initial expectations.”</div>

Just days after last week’s storm shut terminals and disrupted shipping schedules, Maersk warned that weather in the region has “deteriorated beyond initial expectations.”

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<div class="phx-topic">Severe Atlantic storms continue to batter the Bay of Biscay and Western Mediterranean, with container terminals in Morocco and southern Spain forced to shut for the second time in a week. CMA CGM has even announced an “emergency operational recovery” surcharge of $100 per container beginning Feb. 5 for all cargo to the port of Casablanca, which has been heavily impacted by the weather conditions. “Casablanca has been forced to close for almost half of the days in January — an unprecedented situation,” CMA CGM told customers in an advisory this week. “New closures have already been announced for February, driven by the same extreme swell and wind patterns that continue to make safe operations impossible.” Vessel crossings resumed through the Bay of Biscay on Saturday and Sunday and terminal operations were restarted, but Maersk warned customers in an advisory Wednesday that the weather in the region has now “deteriorated beyond initial expectations.” “This means that terminals are expected to close for longer than anticipated, and vessels will be leaving their berths for safety at the latest (Feb. 3),” the carrier said. “This unfortunately also means that vessel schedules will be further delayed, again impacting operations in the Western Mediterranean, Northern Europe and beyond.” The main transhipment terminals affected at the entrance to the Mediterranean are Tanger-Med in Morocco and Algeciras in Spain. A series of extreme winter storms have hammered Europe this year, bringing huge swells and gale force winds to the Western Mediterranean and <a href="https://www.joc.com/article/severe-winter-storm-disrupts-north-europe-port-inland-operations-6148334">freezing temperatures hampering terminal and yard operations</a> in North Europe ports. Contact Greg Knowler at <a href="">greg.knowler@spglobal.com</a>.    </div>

Severe Atlantic storms continue to batter the Bay of Biscay and Western Mediterranean, with container terminals in Morocco and southern Spain forced to shut for the second time in a week. CMA CGM has even announced an “emergency operational recovery” surcharge of $100 per container beginning Feb. 5 for all cargo to the port of Casablanca, which has been heavily impacted by the weather conditions. “Casablanca has been forced to close for almost half of the days in January — an unprecedented situation,” CMA CGM told customers in an advisory this week. “New closures have already been announced for February, driven by the same extreme swell and wind patterns that continue to make safe operations impossible.” Vessel crossings resumed through the Bay of Biscay on Saturday and Sunday and terminal operations were restarted, but Maersk warned customers in an advisory Wednesday that the weather in the region has now “deteriorated beyond initial expectations.” “This means that terminals are expected to close for longer than anticipated, and vessels will be leaving their berths for safety at the latest (Feb. 3),” the carrier said. “This unfortunately also means that vessel schedules will be further delayed, again impacting operations in the Western Mediterranean, Northern Europe and beyond.” The main transhipment terminals affected at the entrance to the Mediterranean are Tanger-Med in Morocco and Algeciras in Spain. A series of extreme winter storms have hammered Europe this year, bringing huge swells and gale force winds to the Western Mediterranean and freezing temperatures hampering terminal and yard operations in North Europe ports. Contact Greg Knowler at  greg.knowler@spglobal.com .    

Container lines

Trans-Atlantic

Asia-Europe

Maritime

Atlantic storms force terminals in Western Mediterranean to close again

<div class="phx-topic abstract-wrapper">Charleston’s total rail lifts for 2025 were about one-quarter of the planned capacity of Navy Base Intermodal Facility, prompting the port’s CEO to reset capital spending plans. </div>

Charleston’s total rail lifts for 2025 were about one-quarter of the planned capacity of Navy Base Intermodal Facility, prompting the port’s CEO to reset capital spending plans.

<div class="phx-topic">The Port of Charleston has paused work on its near-dock rail yard pending agreements with Class I railroads to service the facility, the port’s chief executive said, adding that shipper demand for more intermodal capacity may not be needed until 2028. South Carolina Ports Authority Chief Executive Micah Mallace told state legislators last week Charleston has “slowed construction” of the Navy Base Intermodal Facility until it has finalized operating agreements with CSX Transportation and Norfolk Southern Railway. “We are working on delivering operating agreements with the railroads,” Mallace said. “We aspire to finish that quickly. Upon successful completion of that, we will restart our delivery of the facility.” The last major work on the facility involves 80,000 feet of southbound track that would link Navy Base directly to both CSX and NS trackage. Navy Base has northern access that connects to CSX trackage, but the southern access is a preferred route for both railroads. Under previous chief executive Barbara Melvin, the port expected to announce <a href="https://www.joc.com/article/charlestons-navy-base-rail-yard-project-faces-delays-big-cost-overruns-6070926">a construction award for the project last October</a>, but that award has been paused. Mallace, <a href="https://www.joc.com/article/sc-ports-taps-former-commercial-executive-to-lead-6092988">who took over as CEO that month</a>, has been <a href="https://www.joc.com/article/new-charleston-ceo-seeks-to-regain-container-growth-momentum-6104583">reevaluating the port’s capital spending plans</a> in light of slower growth in cargo demand. “SC Ports continues to work with our partners at CSX and Norfolk Southern to deliver additional rail capacity and enhance intermodal competitiveness to support growth in the Southeast market,” the port said in a statement to the Journal of Commerce. Mallace appeared before the South Carolina legislators to ask that some $2 million in state funding previously appropriated to SC Ports for joint development of a container terminal with the Georgia Port Authority on the South Carolina side of the Savannah River be redirected to a local economic development agency. The request stemmed from the GPA’s “wish to deliver capacity on the Georgia side of the river,” Mallace said. <h3>Navy Base start anticipated for 2028 </h3>SC Ports previously forecast a potential 2026 launch of Navy Base service with CSX and later adding NS access by 2027 once the southern access and other infrastructure was complete. While there’s no specific target for Navy Base’s full completion, Mallace said “we estimate needing to bring it on in 2028.” Intermodal cargo at the port is currently trucked to the CSX and NS intermodal facilities under Charleston’s “Rapid Rail” program. Navy Base allows the port to handle containers faster via a one-mile dedicated drayage road connected to the Leatherman marine terminal. Navy Base is designed to handle 1 million container lifts per year. It connects Charleston directly to its inland ports at Dillon and Greer, which are served respectively by CSX and NS, as well as other destinations in the Southeast. Dillon handled 48,761 container lifts last year, a 33% increase from 2024 largely due to a state initiative to reroute soybean shipments to export markets after the closure of a nearby processing facility, as well as demand from Dillon’s retailer shippers, according to SC Ports. Greer, which serves some of the state’s manufacturers and other retail distributors and can handle 300,000 lifts annually, saw roughly two-thirds of that at 197,805 container lifts last year, up 2% from a year earlier. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a></div>

The Port of Charleston has paused work on its near-dock rail yard pending agreements with Class I railroads to service the facility, the port’s chief executive said, adding that shipper demand for more intermodal capacity may not be needed until 2028. South Carolina Ports Authority Chief Executive Micah Mallace told state legislators last week Charleston has “slowed construction” of the Navy Base Intermodal Facility until it has finalized operating agreements with CSX Transportation and Norfolk Southern Railway. “We are working on delivering operating agreements with the railroads,” Mallace said. “We aspire to finish that quickly. Upon successful completion of that, we will restart our delivery of the facility.” The last major work on the facility involves 80,000 feet of southbound track that would link Navy Base directly to both CSX and NS trackage. Navy Base has northern access that connects to CSX trackage, but the southern access is a preferred route for both railroads. Under previous chief executive Barbara Melvin, the port expected to announce a construction award for the project last October , but that award has been paused. Mallace, who took over as CEO that month , has been reevaluating the port’s capital spending plans in light of slower growth in cargo demand. “SC Ports continues to work with our partners at CSX and Norfolk Southern to deliver additional rail capacity and enhance intermodal competitiveness to support growth in the Southeast market,” the port said in a statement to the Journal of Commerce. Mallace appeared before the South Carolina legislators to ask that some $2 million in state funding previously appropriated to SC Ports for joint development of a container terminal with the Georgia Port Authority on the South Carolina side of the Savannah River be redirected to a local economic development agency. The request stemmed from the GPA’s “wish to deliver capacity on the Georgia side of the river,” Mallace said. Navy Base start anticipated for 2028 SC Ports previously forecast a potential 2026 launch of Navy Base service with CSX and later adding NS access by 2027 once the southern access and other infrastructure was complete. While there’s no specific target for Navy Base’s full completion, Mallace said “we estimate needing to bring it on in 2028.” Intermodal cargo at the port is currently trucked to the CSX and NS intermodal facilities under Charleston’s “Rapid Rail” program. Navy Base allows the port to handle containers faster via a one-mile dedicated drayage road connected to the Leatherman marine terminal. Navy Base is designed to handle 1 million container lifts per year. It connects Charleston directly to its inland ports at Dillon and Greer, which are served respectively by CSX and NS, as well as other destinations in the Southeast. Dillon handled 48,761 container lifts last year, a 33% increase from 2024 largely due to a state initiative to reroute soybean shipments to export markets after the closure of a nearby processing facility, as well as demand from Dillon’s retailer shippers, according to SC Ports. Greer, which serves some of the state’s manufacturers and other retail distributors and can handle 300,000 lifts annually, saw roughly two-thirds of that at 197,805 container lifts last year, up 2% from a year earlier. Contact Michael Angell at michael.angell@spglobal.com

Port News

Port infrastructure

North American ports

Marine terminals

Charleston slows railyard development amid insufficient shipper demand

<div class="phx-topic abstract-wrapper">Absorbing its largest and most complex takeover to date was initially expected to take at least two years to complete, but will now be fully wrapped 20 months after the DB Schenker acquisition closed. </div>

Absorbing its largest and most complex takeover to date was initially expected to take at least two years to complete, but will now be fully wrapped 20 months after the DB Schenker acquisition closed.

<div class="phx-topic">DSV expects to complete its integration of DB Schenker by the end of the year, far earlier than expected, with the emphasis firmly on growing synergies within the combined entity and using artificial intelligence (AI) to transform the business, DSV executives said Wednesday. The integration process was initially expected to take at least two years to complete, but will now be fully wrapped 20 months after the Schenker acquisition closed. The full financial impact will be felt in 2027. “It is the largest and most complex transaction we have ever made, and that was reflected in our initial integration plans,” DSV CFO Michael Ebbe told the Journal of Commerce as the Denmark-based forwarder announced its 2025 results. “We started in August by onboarding countries and going live and in Q3 (and) Q4,” Ebbe said. “And the beginning of this year, we started to onboard complex large markets like China, Germany, Sweden and Singapore and now we have a plan for the next phase to finalize integration before year-end.” The contribution of DB Schenker in the fourth quarter significantly boosted DSV’s annual earnings and volumes. Revenue for 2025 was up 51.3% at $39 billion, gross profit rose 59% to $10 billion, and earnings before interest and taxes (EBIT) of $3.1 billion was up 23.8% from the year prior. Air freight volume of 2 million metric tons for 2025 was up 42%, while ocean freight of 3.7 million TEUs was up 38% year over year. Combined revenue for the air and sea division of $21.7 billion was up 35.6% compared to 2024. In the fourth quarter, despite the contribution of Schenker volume, the air and sea business faced headwinds in the form of geopolitical uncertainty, shifting trade flows and the impact of a weakening US dollar against the Danish krone. Air freight volume was up 63% in Q4 at 592,000 mt, but average gross profit per metric ton of $1,201 was down 8% year over year, mainly due to Schenker dilution. It was a similar picture in ocean freight. Volume was up 52% in Q4 at just over 1 million TEUs, while average gross profit of $601/TEU was down 17%. Synergies from the Schenker integration will reach almost $800 million this year and close to $1.5 billion in 2027. Total transaction and integration costs will be around $1.7 billion. <h3>Implementing AI at an enterprise level </h3>It was the focus on consolidating IT infrastructure and implementing AI at an enterprise level to improve productivity across the combined business that stood out in an earnings call with DSV executives Wednesday. Complexity has increased due to the Schenker acquisition, and DSV is consolidating and combining operations into selected systems across its air and sea, road, and contract logistics divisions, with AI playing an integral part of the digital operations. “When you introduce technology, you can do it on an enterprise level, a regional level, in clusters, countries, branches, departments, (or) on a person level,” DSV CEO Jens Lund told analysts on the earnings call. “But the further you go down into the stack, the less benefit you get of it. ”It has to be something that is done on enterprise level,” he added. “This is the only way we’ve managed to create value. This is also how you transform the business.” Lund pointed to a customs AI tool rolled out by DSV last year to improve the efficiency of customs handling, as well as an in-house “AI Factory” platform that was planning, forecasting and developing AI tools aimed at optimizing routes and processes. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

DSV expects to complete its integration of DB Schenker by the end of the year, far earlier than expected, with the emphasis firmly on growing synergies within the combined entity and using artificial intelligence (AI) to transform the business, DSV executives said Wednesday. The integration process was initially expected to take at least two years to complete, but will now be fully wrapped 20 months after the Schenker acquisition closed. The full financial impact will be felt in 2027. “It is the largest and most complex transaction we have ever made, and that was reflected in our initial integration plans,” DSV CFO Michael Ebbe told the Journal of Commerce as the Denmark-based forwarder announced its 2025 results. “We started in August by onboarding countries and going live and in Q3 (and) Q4,” Ebbe said. “And the beginning of this year, we started to onboard complex large markets like China, Germany, Sweden and Singapore and now we have a plan for the next phase to finalize integration before year-end.” The contribution of DB Schenker in the fourth quarter significantly boosted DSV’s annual earnings and volumes. Revenue for 2025 was up 51.3% at $39 billion, gross profit rose 59% to $10 billion, and earnings before interest and taxes (EBIT) of $3.1 billion was up 23.8% from the year prior. Air freight volume of 2 million metric tons for 2025 was up 42%, while ocean freight of 3.7 million TEUs was up 38% year over year. Combined revenue for the air and sea division of $21.7 billion was up 35.6% compared to 2024. In the fourth quarter, despite the contribution of Schenker volume, the air and sea business faced headwinds in the form of geopolitical uncertainty, shifting trade flows and the impact of a weakening US dollar against the Danish krone. Air freight volume was up 63% in Q4 at 592,000 mt, but average gross profit per metric ton of $1,201 was down 8% year over year, mainly due to Schenker dilution. It was a similar picture in ocean freight. Volume was up 52% in Q4 at just over 1 million TEUs, while average gross profit of $601/TEU was down 17%. Synergies from the Schenker integration will reach almost $800 million this year and close to $1.5 billion in 2027. Total transaction and integration costs will be around $1.7 billion. Implementing AI at an enterprise level It was the focus on consolidating IT infrastructure and implementing AI at an enterprise level to improve productivity across the combined business that stood out in an earnings call with DSV executives Wednesday. Complexity has increased due to the Schenker acquisition, and DSV is consolidating and combining operations into selected systems across its air and sea, road, and contract logistics divisions, with AI playing an integral part of the digital operations. “When you introduce technology, you can do it on an enterprise level, a regional level, in clusters, countries, branches, departments, (or) on a person level,” DSV CEO Jens Lund told analysts on the earnings call. “But the further you go down into the stack, the less benefit you get of it. ”It has to be something that is done on enterprise level,” he added. “This is the only way we’ve managed to create value. This is also how you transform the business.” Lund pointed to a customs AI tool rolled out by DSV last year to improve the efficiency of customs handling, as well as an in-house “AI Factory” platform that was planning, forecasting and developing AI tools aimed at optimizing routes and processes. Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo Forwarder News

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Forwarding

Air Cargo

DSV moves to transform its business as Schenker integration accelerates

<div class="phx-topic abstract-wrapper">CMA CGM and Hapag-Lloyd are seeking a general rate increase of $1,000 per FEU starting March 1 to reverse a steady spot rate decline that began in July 2025.</div>

CMA CGM and Hapag-Lloyd are seeking a general rate increase of $1,000 per FEU starting March 1 to reverse a steady spot rate decline that began in July 2025.

<div class="phx-topic">Container lines are marshalling another rate hike on the Asia-to-Latin America trade amid rising volumes, but recent capacity injections into a market where spot rates have plummeted more than 80% over the past seven months offer a hard backstop to their efforts. CMA CGM and Hapag-Lloyd are seeking a general rate increase of $1,000 per FEU starting March 1 to reverse a steady spot rate decline that began in July 2025 when prices for Shanghai to Santos in Brazil were $6,374 per TEU, according to the Shanghai Shipping Exchange. Those rates are now at $1,131 per TEU, a decline of 82%. Container lines began adding more capacity to chase the higher rates; major carriers injected some 700,000 TEUs into the trade in the last 12 months, according to advisory firm MDS Transmodal. Capacity from Asia to the East Coast of South America is due to hit 303,517 TEUs in March, according to eeSea. That’s up almost 9% from February and would be the highest level in more than three years. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="3f037742-ccbd-42e6-a9c1-eef2aebad508"></dynamic-object></div>The capacity rush comes as CMA CGM announced its planned rate increase in an advisory Tuesday, following Hapag-Lloyd’s notice on Friday. Both carriers are again seeking a $1,000 per box across-the-board increase on all trades from Asia to Latin America, including the West and East coasts of South America, Mexico, Central America, and the Caribbean. Hapag-Lloyd said the increase will apply to 20-foot, 40-foot and 40-foot non-operated reefers, while CMA CGM said its rate hike will also apply to out-of-gauge and paying empties. The two carriers announced similar $1,000 per-box rate increases at the end of last year. CMA CGM said in a Dec. 18 advisory the increase would apply from Jan. 1, while Hapag-Lloyd published a notice on Nov. 21 saying the revised rate would take effect from Dec. 1. But Brazilian forwarders questioned whether the carriers would be any more successful with their latest planned hike than they were previously. “The fundamentals haven’t really changed since then. Yes, demand has been strong, but there is significant overcapacity,” a senior executive at a Sao Paolo-based freight forwarder told the Journal of Commerce. “Our partners in China tell us shipping lines have struggled to fill their vessels. “Rates might pick up after the Lunar New Year festival period as demand rebounds, but we’ve been told there’s more capacity coming into the market,” the source added. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="69a20079-176d-4590-97c9-677559ec748f"></dynamic-object></div>CMA CGM did not give a comparison, but Hapag-Lloyd’s rate notices showed it had attempted to push its December GRI in a falling market. In its latest GRI announcement, Hapag-Lloyd said East Coast of South America base rates were now $1,000 per 20-foot container and $1,200 for a 40-foot box. By comparison, West Coast of South America base rates were down to $750 for both a 20-foot and 40-foot container, it said. Platts, a sister company of the Journal of Commerce within S&amp;P Global, pegged rates from North Asia to the West Coast of South America at $1,200 per FEU as of Feb. 2, down 60% year over year. A Hapag-Lloyd spokesperson did not comment specifically on the GRIs, cargo demand or capacity when contacted by the Journal of Commerce. “Not much I can say other than that we are continuously monitoring market developments, and rate adjustments on the back of changed supply and demand are a part of our day-to-day business,” the spokesperson said. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Container lines are marshalling another rate hike on the Asia-to-Latin America trade amid rising volumes, but recent capacity injections into a market where spot rates have plummeted more than 80% over the past seven months offer a hard backstop to their efforts. CMA CGM and Hapag-Lloyd are seeking a general rate increase of $1,000 per FEU starting March 1 to reverse a steady spot rate decline that began in July 2025 when prices for Shanghai to Santos in Brazil were $6,374 per TEU, according to the Shanghai Shipping Exchange. Those rates are now at $1,131 per TEU, a decline of 82%. Container lines began adding more capacity to chase the higher rates; major carriers injected some 700,000 TEUs into the trade in the last 12 months, according to advisory firm MDS Transmodal. Capacity from Asia to the East Coast of South America is due to hit 303,517 TEUs in March, according to eeSea. That’s up almost 9% from February and would be the highest level in more than three years. The capacity rush comes as CMA CGM announced its planned rate increase in an advisory Tuesday, following Hapag-Lloyd’s notice on Friday. Both carriers are again seeking a $1,000 per box across-the-board increase on all trades from Asia to Latin America, including the West and East coasts of South America, Mexico, Central America, and the Caribbean. Hapag-Lloyd said the increase will apply to 20-foot, 40-foot and 40-foot non-operated reefers, while CMA CGM said its rate hike will also apply to out-of-gauge and paying empties. The two carriers announced similar $1,000 per-box rate increases at the end of last year. CMA CGM said in a Dec. 18 advisory the increase would apply from Jan. 1, while Hapag-Lloyd published a notice on Nov. 21 saying the revised rate would take effect from Dec. 1. But Brazilian forwarders questioned whether the carriers would be any more successful with their latest planned hike than they were previously. “The fundamentals haven’t really changed since then. Yes, demand has been strong, but there is significant overcapacity,” a senior executive at a Sao Paolo-based freight forwarder told the Journal of Commerce. “Our partners in China tell us shipping lines have struggled to fill their vessels. “Rates might pick up after the Lunar New Year festival period as demand rebounds, but we’ve been told there’s more capacity coming into the market,” the source added. CMA CGM did not give a comparison, but Hapag-Lloyd’s rate notices showed it had attempted to push its December GRI in a falling market. In its latest GRI announcement, Hapag-Lloyd said East Coast of South America base rates were now $1,000 per 20-foot container and $1,200 for a 40-foot box. By comparison, West Coast of South America base rates were down to $750 for both a 20-foot and 40-foot container, it said. Platts, a sister company of the Journal of Commerce within S&P Global, pegged rates from North Asia to the West Coast of South America at $1,200 per FEU as of Feb. 2, down 60% year over year. A Hapag-Lloyd spokesperson did not comment specifically on the GRIs, cargo demand or capacity when contacted by the Journal of Commerce. “Not much I can say other than that we are continuously monitoring market developments, and rate adjustments on the back of changed supply and demand are a part of our day-to-day business,” the spokesperson said. Contact Keith Wallis at keithwallis@hotmail.com .

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Carriers try new rate hike on Asia-Latin America, but fresh capacity provides headwind

<div class="phx-topic abstract-wrapper">Momentum from robust growth on some Asian export trade lanes following the Christmas holidays has now slowed, with forwarders and analysts expecting muted demand over the coming two weeks.</div>

Momentum from robust growth on some Asian export trade lanes following the Christmas holidays has now slowed, with forwarders and analysts expecting muted demand over the coming two weeks.

<div class="phx-topic">Air cargo analysts and forwarders are expecting a modest pre-Lunar New Year uptick in exports on Asian trade lanes following solid demand growth in January from China to Europe and from Southeast Asia and Taiwan to the US. With the Lunar New Year beginning relatively late on Feb. 17, industry forecasts are for a gradual increase in volume and rates over the next two weeks before factories close for Asia’s main annual holiday. Capacity trends on the Asia-Europe lane suggest “robust” volume growth in January from China’s inland air freight hubs of Chongqing, Chengdu and Zhengzhou, according to Rotate analyst Ray Zedov. While Asia to US capacity was down year over year from all Asia-Pacific regions, “a deeper dive into the US market shows that capacity from Vietnam continues to grow as Chinese imports to the US are impacted by the new tariff policy in the US,” Zedov told the Journal of Commerce. The US removed its “de minimis” duty exemption on low-value goods from all its trading partners on Aug. 29 last year following the scrapping of duty-free access for low-value Chinese imports in May. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="33a72818-4d4c-4365-97ce-ccb39dab8dd8"></dynamic-object></div>Sou Ping Chee, regional head of air freight in Asia-Pacific for Hellmann Worldwide Logistics, said volume out of Asia had weakened by early February even with the holidays just two weeks away, which suggests muted demand this year. “However, there is still a general expectation that demand will pick up next week ahead of Lunar New Year from China, Hong Kong, Vietnam and Taiwan across industries before these markets close for the biggest festive season in this part of the world,” he said. An Asia-based executive at a global forwarder said he was not seeing any major uptick in demand on China-Europe and the wider Asia Pacific-North America market. “It remains rather flat and even prior to the Lunar New Year we are not seeing anything exceptional,” the source said. He added that although overall demand out of Asia-Pacific to North America has flattened out, demand out of Taipei and Vietnam has remained solid. “Taipei-US, Bangkok-US and Hanoi-US are busy,” he said. “Rates are holding steady at a higher level and demand remains strong, largely driven by AI-related components. Bangkok-Europe and Vietnam-Europe are also busy.” <h3>Rates rising on Asian export trade lanes </h3>Netherlands-based air cargo analyst WorldACD said after two weeks of strong sequential volume growth from Asia-Pacific to US and Europe markets, overall week-over-week growth came to a halt last week with flat volumes for both trade lanes. When compared with the same week last year, volume to the US was down 1% and volume to Europe was up 7%. While spot rates on the trans-Pacific and Asia-Europe in the last week of January were down 9% year over year, there were significant week-over-week increases on both trades, particularly from China origins, WorldACD data shows. Spot rates to the US last week rose 6% compared with the previous week to $4.02 per kilogram, while rates to Europe were up 7% at $3.80/kg as the market edged into the pre-Lunar New Year peak and capacity tightened on some airport pairings. Sou noted that rates on the Asian export trade lanes have remained at healthy levels in the first weeks of 2026 after softening over the Christmas period. “As such we do not expect as sharp an increase now, but rather spot rates are likely to creep up as we enter the last 10 days to Lunar New Year and pick up momentum from next week onwards,” he said. Willie Walsh, director general of the International Air Transport Association (IATA), said the moderate demand will extend to the full year, with global air freight demand in 2026 expected to grow 2.4% from 2025, although that would be down from last year’s 3.4% growth over 2024. “We can expect that demand will continue to be shaped by trade and geopolitical developments,” Walsh noted in a January market update, adding that carriers will continue to relocate capacity to support shifting trade patterns. Contact Greg Knowler at <a href="">greg.knowler@spglobal.com</a>.   </div>

Air cargo analysts and forwarders are expecting a modest pre-Lunar New Year uptick in exports on Asian trade lanes following solid demand growth in January from China to Europe and from Southeast Asia and Taiwan to the US. With the Lunar New Year beginning relatively late on Feb. 17, industry forecasts are for a gradual increase in volume and rates over the next two weeks before factories close for Asia’s main annual holiday. Capacity trends on the Asia-Europe lane suggest “robust” volume growth in January from China’s inland air freight hubs of Chongqing, Chengdu and Zhengzhou, according to Rotate analyst Ray Zedov. While Asia to US capacity was down year over year from all Asia-Pacific regions, “a deeper dive into the US market shows that capacity from Vietnam continues to grow as Chinese imports to the US are impacted by the new tariff policy in the US,” Zedov told the Journal of Commerce. The US removed its “de minimis” duty exemption on low-value goods from all its trading partners on Aug. 29 last year following the scrapping of duty-free access for low-value Chinese imports in May. Sou Ping Chee, regional head of air freight in Asia-Pacific for Hellmann Worldwide Logistics, said volume out of Asia had weakened by early February even with the holidays just two weeks away, which suggests muted demand this year. “However, there is still a general expectation that demand will pick up next week ahead of Lunar New Year from China, Hong Kong, Vietnam and Taiwan across industries before these markets close for the biggest festive season in this part of the world,” he said. An Asia-based executive at a global forwarder said he was not seeing any major uptick in demand on China-Europe and the wider Asia Pacific-North America market. “It remains rather flat and even prior to the Lunar New Year we are not seeing anything exceptional,” the source said. He added that although overall demand out of Asia-Pacific to North America has flattened out, demand out of Taipei and Vietnam has remained solid. “Taipei-US, Bangkok-US and Hanoi-US are busy,” he said. “Rates are holding steady at a higher level and demand remains strong, largely driven by AI-related components. Bangkok-Europe and Vietnam-Europe are also busy.” Rates rising on Asian export trade lanes Netherlands-based air cargo analyst WorldACD said after two weeks of strong sequential volume growth from Asia-Pacific to US and Europe markets, overall week-over-week growth came to a halt last week with flat volumes for both trade lanes. When compared with the same week last year, volume to the US was down 1% and volume to Europe was up 7%. While spot rates on the trans-Pacific and Asia-Europe in the last week of January were down 9% year over year, there were significant week-over-week increases on both trades, particularly from China origins, WorldACD data shows. Spot rates to the US last week rose 6% compared with the previous week to $4.02 per kilogram, while rates to Europe were up 7% at $3.80/kg as the market edged into the pre-Lunar New Year peak and capacity tightened on some airport pairings. Sou noted that rates on the Asian export trade lanes have remained at healthy levels in the first weeks of 2026 after softening over the Christmas period. “As such we do not expect as sharp an increase now, but rather spot rates are likely to creep up as we enter the last 10 days to Lunar New Year and pick up momentum from next week onwards,” he said. Willie Walsh, director general of the International Air Transport Association (IATA), said the moderate demand will extend to the full year, with global air freight demand in 2026 expected to grow 2.4% from 2025, although that would be down from last year’s 3.4% growth over 2024. “We can expect that demand will continue to be shaped by trade and geopolitical developments,” Walsh noted in a January market update, adding that carriers will continue to relocate capacity to support shifting trade patterns. Contact Greg Knowler at  greg.knowler@spglobal.com .   

Solid January demand to largely mute Lunar New Year air freight rush

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