<div class="phx-topic abstract-wrapper">Capacity will continue to be the greatest challenge facing cargo owners moving goods from Asia by air this year. </div>

Capacity will continue to be the greatest challenge facing cargo owners moving goods from Asia by air this year.

Feature image

<div>The big picture: Capacity constraints on outbound air cargo routes from Asia, particularly China, will persist in 2025, with volumes continuing to outstrip available space. Airlines have been postponing the retirement of freighters to cope with booming e-commerce demand in the US and Europe, but many of those aircraft are at the end of their working life, and production delays at both Boeing and Airbus are slowing the arrival of any new capacity. <div><img></div>A look back: Air cargo on the two main trade lanes from Asia to North America and Europe was stuck in a perpetual peak season throughout 2024....

The big picture: Capacity constraints on outbound air cargo routes from Asia, particularly China, will persist in 2025, with volumes continuing to outstrip available space. Airlines have been postponing the retirement of freighters to cope with booming e-commerce demand in the US and Europe, but many of those aircraft are at the end of their working life, and production delays at both Boeing and Airbus are slowing the arrival of any new capacity. A look back: Air cargo on the two main trade lanes from Asia to North America and Europe was stuck in a perpetual peak season throughout 2024. Following the traditional air freight peak season in the fourth quarter of 2023, hostilities in the Red Sea — and the resulting diversion of container ships around southern Africa — forced shippers of time-sensitive cargo into the air. As planes leaving Asia began to quickly fill up, competition for space emerged from an unexpected source: e-commerce platforms contracting directly with airlines. Even as online shopping demand accelerated during the COVID-19 pandemic, the major e-commerce platforms typically had fulfillment centers in destination markets. Chinese e-commerce giants Temu and Shein changed all that, cutting out forwarders and contracting space directly with airlines to move packages into the US and Europe. US package imports by the end of September were more than 1 billion units compared with 140 million units in 2023, according to a White House briefing, as the platforms made use of its generous “de minimis” value threshold; shipments valued at less than $800 in the US and €150 in the EU are exempt from import duties. The e-commerce platforms in the past year have factored this into their US and EU supply chains, which almost exclusively use air cargo. Although available capacity increased almost 5% during the first 10 months of the year, demand grew more than 12%, according to rate benchmarking and analytics platform Xeneta, pushing global load factors and rates to their highest levels in two years. A look ahead: Capacity will continue to be the greatest challenge facing cargo owners moving goods from Asia by air in 2025. As e-commerce siphons off huge amounts of space directly from airlines, forwarders are coming under increasing pressure to secure capacity for their customers shipping traditional cargo. That pressure is often translated into forwarders chartering freighter capacity at a high cost, adding further upward pressure on rates, especially during historical peaks around Lunar New Year and November online sales promotions. Exacerbating ongoing space constraints for shippers is an increasing shortage of intra-Asia capacity as airlines shift planes to the more lucrative long-haul routes. The heavy competition for limited space will likely keep rates elevated throughout 2025. Scrutiny of Chinese online platforms by US authorities is also likely to intensify next year, with plans in place to reform the US de minimis program that will almost certainly be accelerated by the new Trump administration. The next inflection: Even if the US significantly lowers the de minimis value threshold, however, it is unlikely to have any real impact on air cargo demand out of China. The average value order of US e-commerce transactions is about $170, according to Hong Kong-based CEIC economists. More important is a US proposal put forward in September 2024 by the Biden administration that, if adopted, could result in 40% of e-commerce products no longer covered by de minimis regulations and include 70% of textile and apparel exports from China. That would have a significant negative impact on sales via e-commerce platforms that rely on direct shipments to US consumers from China. Contact Greg Knowler at greg.knowler@spglobal.com.

Air Cargo Forwarder News

Air Cargo Carriers News

Air Cargo

Ex-Asia air freight capacity constraints to persist in 2025

<div class="phx-topic abstract-wrapper">A trio of bills would change US shipping law to reflect the current wariness surrounding China’s maritime industry and promote cargo preference for US fleets. </div>

A trio of bills would change US shipping law to reflect the current wariness surrounding China’s maritime industry and promote cargo preference for US fleets.

<div class="phx-topic">Congress is looking to change US shipping law to further insulate ports from China’s maritime influence while boosting the domestic maritime industry. Separately, the Trump administration said it’s putting grants for ports and other projects on a fast track by removing regulatory rules placed on them by the Biden administration. The House of Representatives approved three bills on Monday that were sponsored by members of the House Transportation Committee. The bills, which all seek to amend US law that governs shipping, still need to be referred to the Senate for a vote. The bills include the Maritime Supply Chain Security Act, sponsored by Rep. David Rouzer (R – North Carolina). Rouzer’s bill would allow funds from the Maritime Administration’s Port Infrastructure Development Program (PIDP) to replace cranes or related software that was installed “by the People’s Republic of China or any department, ministry, center, agency, or instrumentality of the Government of the People’s Republic of China.” Under current law, PIDP grants are for “operational improvements” at ports, with no distinction as to the source of the equipment. Rep. Ken Calvert (R – California) sponsored a separate bill, called the Secure Our Ports Act, that would block any entity linked to China, Russia, North Korea or Iran from leasing or operating facilities at US ports. Any foreign transaction for a US-based asset already gets vetted through the Office of Foreign Asset Control under the Treasury Department. Rep. Salud Carbajal (D – California) sponsored the American Cargo for American Ships Act, which would require the Department of Transportation to use US commercial vessels for carrying 100% of the materials used in department-funded projects. Current US shipping law requires federal agencies to have at least half of the materials used in any project to be shipped on US vessels if such vessels “are available at fair and reasonable rates,” a similar condition outlined in Carbajal’s bill. As part of its efforts to remedy China’s dominance of the maritime industry, the US Trade Representative (USTR) proposed in February that <a href="https://www.joc.com/article/us-port-fees-could-hit-chinese-ships-under-trump-trade-proposal-5949409">an increasing portion of US exports be carried on US vessels</a>. However, the proposal was ultimately nixed in the USTR’s final list of remedies. The USTR is also considering <a href="https://www.joc.com/article/ports-look-to-delay-proposed-us-tariffs-on-chinese-made-cranes-6007628">a new set of tariffs on Chinese crane and port equipment</a>. <h3>Projects move forward after port grants advance</h3>Separately, the Transportation Department said in a statement Tuesday it had approved 76 infrastructure projects that were approved for unobligated grants under the Biden administration but not executed. The agency said it “ripped out burdensome” requirements for the projects that will now allow them to go forward. The DOT said it’s cleared about one-third of 3,200 projects from the previous administration. “This unprecedented backlog of unobligated grants delayed critical investments in communities across the country,” DOT said. Among the newly obligated grants are a $43 million PIDP grant from 2023 to build a marshalling area at the Sparrow Point project outside of the Port of Baltimore. The Transportation Department had previously freed up a $54 million grant award for the Northwest Seaport Alliance for expanding the Port of Tacoma’s Husky Terminal. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com ">michael.angell@spglobal.com</a></div>

Congress is looking to change US shipping law to further insulate ports from China’s maritime influence while boosting the domestic maritime industry. Separately, the Trump administration said it’s putting grants for ports and other projects on a fast track by removing regulatory rules placed on them by the Biden administration. The House of Representatives approved three bills on Monday that were sponsored by members of the House Transportation Committee. The bills, which all seek to amend US law that governs shipping, still need to be referred to the Senate for a vote. The bills include the Maritime Supply Chain Security Act, sponsored by Rep. David Rouzer (R – North Carolina). Rouzer’s bill would allow funds from the Maritime Administration’s Port Infrastructure Development Program (PIDP) to replace cranes or related software that was installed “by the People’s Republic of China or any department, ministry, center, agency, or instrumentality of the Government of the People’s Republic of China.” Under current law, PIDP grants are for “operational improvements” at ports, with no distinction as to the source of the equipment. Rep. Ken Calvert (R – California) sponsored a separate bill, called the Secure Our Ports Act, that would block any entity linked to China, Russia, North Korea or Iran from leasing or operating facilities at US ports. Any foreign transaction for a US-based asset already gets vetted through the Office of Foreign Asset Control under the Treasury Department. Rep. Salud Carbajal (D – California) sponsored the American Cargo for American Ships Act, which would require the Department of Transportation to use US commercial vessels for carrying 100% of the materials used in department-funded projects. Current US shipping law requires federal agencies to have at least half of the materials used in any project to be shipped on US vessels if such vessels “are available at fair and reasonable rates,” a similar condition outlined in Carbajal’s bill. As part of its efforts to remedy China’s dominance of the maritime industry, the US Trade Representative (USTR) proposed in February that an increasing portion of US exports be carried on US vessels . However, the proposal was ultimately nixed in the USTR’s final list of remedies. The USTR is also considering a new set of tariffs on Chinese crane and port equipment . Projects move forward after port grants advance Separately, the Transportation Department said in a statement Tuesday it had approved 76 infrastructure projects that were approved for unobligated grants under the Biden administration but not executed. The agency said it “ripped out burdensome” requirements for the projects that will now allow them to go forward. The DOT said it’s cleared about one-third of 3,200 projects from the previous administration. “This unprecedented backlog of unobligated grants delayed critical investments in communities across the country,” DOT said. Among the newly obligated grants are a $43 million PIDP grant from 2023 to build a marshalling area at the Sparrow Point project outside of the Port of Baltimore. The Transportation Department had previously freed up a $54 million grant award for the Northwest Seaport Alliance for expanding the Port of Tacoma’s Husky Terminal. Contact Michael Angell at michael.angell@spglobal.com

Transport, Trade and Regulation News

Port infrastructure

North American ports

Congress takes aim at China’s maritime industry with new legislation

<div class="phx-topic abstract-wrapper">The lack of interoperability between a wide-ranging set of tracking hardware products presents an obstacle for customs authorities to overcome, a new report has found. </div>

The lack of interoperability between a wide-ranging set of tracking hardware products presents an obstacle for customs authorities to overcome, a new report has found.

<div class="phx-topic">Devices designed to secure and track international cargo face data security, legal and interoperability challenges, a new report from the World Customs Organization (WCO) said Tuesday. The report, Study Report on Smart Security Devices (SSDs), said connected device technologies such as smart locks, track-and-trace sensors and smart containers are playing a growing role in global logistics operations, which is impacting procedures used by customs authorities to verify cargo. WCO represents 186 customs administrations that collectively process approximately 98% of world trade. Among the findings in the report is that the lack of interoperability between device providers remains a challenge. “The absence of universal protocols for encryption, frequency usage and communication hinders seamless monitoring of cross-border operations,” the report said. “SSDs must navigate regulatory fragmentation, making widespread coverage difficult without coordinated global standards.” The WCO also said challenges exist, in particular, in coordinating investments across what it described as passive, semi-active and active technologies. Passive technologies include “entry-level security devices” that require no internal power and generally use radio frequency identification (RFID) tags and physical tamper-evident mechanisms, and are best suited for low-cost, low-maintenance applications. On the other end of the spectrum are advanced devices that rely on built-in GPS, real-time communication capabilities, encrypted data transmission and two-way network control. “While highly effective for real-time cargo monitoring and security alerts, they require ongoing battery management and face regulatory complexity in cross-border settings,” the report said. The report is intended to help customs authorities adapt to growing usage of smart devices and to take advantage of their presence in international supply chains. “With increasing trade volumes, customs administrations must be prepared to clear goods more efficiently without compromising on their commitment to protect society or disrupting international supply chains,” WCO Secretary-General Ian Saunders said in a statement accompanying the report. “The adoption of smart security devices by customs administrations represents a significant step forward in leveraging digital solutions to enhance the security of global supply chains.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Devices designed to secure and track international cargo face data security, legal and interoperability challenges, a new report from the World Customs Organization (WCO) said Tuesday. The report, Study Report on Smart Security Devices (SSDs), said connected device technologies such as smart locks, track-and-trace sensors and smart containers are playing a growing role in global logistics operations, which is impacting procedures used by customs authorities to verify cargo. WCO represents 186 customs administrations that collectively process approximately 98% of world trade. Among the findings in the report is that the lack of interoperability between device providers remains a challenge. “The absence of universal protocols for encryption, frequency usage and communication hinders seamless monitoring of cross-border operations,” the report said. “SSDs must navigate regulatory fragmentation, making widespread coverage difficult without coordinated global standards.” The WCO also said challenges exist, in particular, in coordinating investments across what it described as passive, semi-active and active technologies. Passive technologies include “entry-level security devices” that require no internal power and generally use radio frequency identification (RFID) tags and physical tamper-evident mechanisms, and are best suited for low-cost, low-maintenance applications. On the other end of the spectrum are advanced devices that rely on built-in GPS, real-time communication capabilities, encrypted data transmission and two-way network control. “While highly effective for real-time cargo monitoring and security alerts, they require ongoing battery management and face regulatory complexity in cross-border settings,” the report said. The report is intended to help customs authorities adapt to growing usage of smart devices and to take advantage of their presence in international supply chains. “With increasing trade volumes, customs administrations must be prepared to clear goods more efficiently without compromising on their commitment to protect society or disrupting international supply chains,” WCO Secretary-General Ian Saunders said in a statement accompanying the report. “The adoption of smart security devices by customs administrations represents a significant step forward in leveraging digital solutions to enhance the security of global supply chains.” Contact Eric Johnson at eric.johnson@spglobal.com .

Supply chain

Logistics Technology News

Cargo sensors present benefits, challenges for regulatory agencies: WCO

<div class="phx-topic abstract-wrapper">But all eyes are on the July 9 end to the 90-day pause on US tariffs that forwarders believe will determine the level of demand through the rest of the year.</div>

But all eyes are on the July 9 end to the 90-day pause on US tariffs that forwarders believe will determine the level of demand through the rest of the year.

<div class="phx-topic">Strong demand on Asia-Europe continues to hold up short-term rates that are being further supported by ocean carriers shifting capacity from the trade to the trans-Pacific following the US’ May 12 pause on sky-high China tariffs. But all eyes are on another date — July 9, the end of the 90-day pause on the so-called reciprocal tariffs the Trump administration levied on its non-China trading partners. Forwarders believe what happens after that will determine the level of demand on Asia-Europe routes in the second half of the year. Burkhard Eling, CEO of German forwarder Dachser, said shippers and forwarders were struggling to forecast demand for the rest of the year with the tariffs impacting trade lanes outside the trans-Pacific. “It all depends on what will happen on July 9,” Eling told the Journal of Commerce in an interview. “Everyone is preparing for this date and that will affect a lot of shipments in the second half, but predicting what will happen is nearly impossible.” A Hapag-Lloyd spokesperson said the peak season has already started on Asia-Europe, with solid demand on the westbound trade lane. The peak shipping period on the trade typically runs from June to China’s “Golden Week” in the first week of October. “Demand is stronger on the Med trades, as capacity has been pulled out by the competition,” the spokesperson told the Journal of Commerce Tuesday. But he conceded that forward visibility was challenging because of the unpredictability in the market. Eling also cited the uncertainty moving forward. “If somebody says he knows there will be a peak season, I would love to have his crystal ball,” he said. “I wouldn’t say the classic seasonality is gone, but with all the tariffs and the complications, I don’t expect a big season in the second half.” <h3>Record capacity to be deployed in July </h3>The latest Asia-to-Europe volume data from Container Trades Statistics (CTS) is for April, when 1.64 million TEUs were transported westward, an increase of 8.6% year over year and a 6% gain from March. When the North Europe and Mediterranean destinations are separated, Asia-North Europe volume rose 6.6% year over year in April to 1 million TEUs, while Asia-Mediterranean volume was up 11.1% at 641,690 TEUs. In the first four months of 2025, total Asia-Europe volume was up 9% year over year at 6.13 million TEUs, with the Asia-North Europe segment rising 6.6% to 3.72 million TEUs and Asia-Mediterranean surging 12.14% to 2.4 million TEUs, according to CTS. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="3319784d-75e8-4a04-a4e6-0497fdd266f3"></dynamic-object></div>Data from rate benchmarking platform Xeneta shows the four-week rolling average capacity offered on Asia-Europe reached a record 346,000 TEUs on June 5, higher than at any point during the pandemic. “But as the extra loaders that brought an all-time high level of capacity to the Asia-North Europe trade are now needed back on the trans-Pacific, the short-term contracts are rising in early and mid-June,” Peter Sand, chief analyst at Xeneta, told the Journal of Commerce Tuesday. Blank sailings are also increasing on Asia-Europe, with data from visibility provider eeSea showing 86,241 TEUs will be cut in July, up from 80,000 TEUs in June. But at the same time, a record 1.15 million TEUs in capacity will be deployed in July. Despite being awash with capacity, rates are staying aloft because of the robust demand combined with ships exiting to the trans-Pacific and capacity still being absorbed by the ongoing diversions around southern Africa. Spot rates from Asia to North Europe this week rose to $2,800 per FEU, up almost 15% from the previous week, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Asia-Mediterranean rates were up 3.7% at $4,500/FEU. Xeneta’s index has the Asia-North Europe rates flat at $2,419/FEU this week, while Drewry’s World Container Index shows rates from Shanghai to Rotterdam up 32% on the previous week and Shanghai-Genoa rates up 38%. “A lot of carriers are moving their tonnage back to the trans-Pacific trade and the overcapacity we had is diminishing while booking strength is increasing,” said Tom Turner, head of ocean for Europe, the Middle East and Africa at Toll Group. <h3>Confident carriers raising rates </h3>The supply-demand dynamics are giving carriers the confidence to introduce rate increases to the market, Turner noted. Following the June 1 freight-all-kinds (FAK) increases that led to a sharp rise in rates, some ocean carriers have announced rate hikes and peak season surcharges for June 15. “The carriers might be overly ambitious and shooting a bit higher than what they’re realistically hoping to achieve, but at the same time, I wouldn’t feel comfortable advising a customer that the rates are going to go down,” Turner said. “We are in a tight enough market to say that the carriers will be able to defend some of the increases,” he added.<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="76717833-8467-4d6f-a836-ffe18c5dc893"></dynamic-object></div>Matthias Hansen, senior vice president of global ocean freight at France-based forwarder Geodis, also pointed to carriers shifting tonnage back to the trans-Pacific to take advantage of the high rates from China to the US. “There is something like 28 extra loaders moving out of Asia-Europe and I expect a shortage of equipment will emerge because there is such a big pull towards the US,” he told the Journal of Commerce. Hansen said although he was surprised at the strength of the Asia-Europe demand, he expects the strong volume will continue for “at least another two to three months.” Eling attributed part of the current rising demand to the fact that when the US imposed 145% tariffs on China and shippers paused orders, Chinese producers quickly looked for new markets and Asia-Europe was the biggest one. That led to rising demand on the trade that continued even after the mid-May pause. “When you consider [145%] tariffs from the US, Chinese producers need to find different markets to place their goods, and of course, Europe is a big market,” he said. “This is the natural consequence of the tariffs that we are seeing in the demand.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Strong demand on Asia-Europe continues to hold up short-term rates that are being further supported by ocean carriers shifting capacity from the trade to the trans-Pacific following the US’ May 12 pause on sky-high China tariffs. But all eyes are on another date — July 9, the end of the 90-day pause on the so-called reciprocal tariffs the Trump administration levied on its non-China trading partners. Forwarders believe what happens after that will determine the level of demand on Asia-Europe routes in the second half of the year. Burkhard Eling, CEO of German forwarder Dachser, said shippers and forwarders were struggling to forecast demand for the rest of the year with the tariffs impacting trade lanes outside the trans-Pacific. “It all depends on what will happen on July 9,” Eling told the Journal of Commerce in an interview. “Everyone is preparing for this date and that will affect a lot of shipments in the second half, but predicting what will happen is nearly impossible.” A Hapag-Lloyd spokesperson said the peak season has already started on Asia-Europe, with solid demand on the westbound trade lane. The peak shipping period on the trade typically runs from June to China’s “Golden Week” in the first week of October. “Demand is stronger on the Med trades, as capacity has been pulled out by the competition,” the spokesperson told the Journal of Commerce Tuesday. But he conceded that forward visibility was challenging because of the unpredictability in the market. Eling also cited the uncertainty moving forward. “If somebody says he knows there will be a peak season, I would love to have his crystal ball,” he said. “I wouldn’t say the classic seasonality is gone, but with all the tariffs and the complications, I don’t expect a big season in the second half.” Record capacity to be deployed in July The latest Asia-to-Europe volume data from Container Trades Statistics (CTS) is for April, when 1.64 million TEUs were transported westward, an increase of 8.6% year over year and a 6% gain from March. When the North Europe and Mediterranean destinations are separated, Asia-North Europe volume rose 6.6% year over year in April to 1 million TEUs, while Asia-Mediterranean volume was up 11.1% at 641,690 TEUs. In the first four months of 2025, total Asia-Europe volume was up 9% year over year at 6.13 million TEUs, with the Asia-North Europe segment rising 6.6% to 3.72 million TEUs and Asia-Mediterranean surging 12.14% to 2.4 million TEUs, according to CTS. Data from rate benchmarking platform Xeneta shows the four-week rolling average capacity offered on Asia-Europe reached a record 346,000 TEUs on June 5, higher than at any point during the pandemic. “But as the extra loaders that brought an all-time high level of capacity to the Asia-North Europe trade are now needed back on the trans-Pacific, the short-term contracts are rising in early and mid-June,” Peter Sand, chief analyst at Xeneta, told the Journal of Commerce Tuesday. Blank sailings are also increasing on Asia-Europe, with data from visibility provider eeSea showing 86,241 TEUs will be cut in July, up from 80,000 TEUs in June. But at the same time, a record 1.15 million TEUs in capacity will be deployed in July. Despite being awash with capacity, rates are staying aloft because of the robust demand combined with ships exiting to the trans-Pacific and capacity still being absorbed by the ongoing diversions around southern Africa. Spot rates from Asia to North Europe this week rose to $2,800 per FEU, up almost 15% from the previous week, according to Platts, a sister company of the Journal of Commerce within S&P Global. Asia-Mediterranean rates were up 3.7% at $4,500/FEU. Xeneta’s index has the Asia-North Europe rates flat at $2,419/FEU this week, while Drewry’s World Container Index shows rates from Shanghai to Rotterdam up 32% on the previous week and Shanghai-Genoa rates up 38%. “A lot of carriers are moving their tonnage back to the trans-Pacific trade and the overcapacity we had is diminishing while booking strength is increasing,” said Tom Turner, head of ocean for Europe, the Middle East and Africa at Toll Group. Confident carriers raising rates The supply-demand dynamics are giving carriers the confidence to introduce rate increases to the market, Turner noted. Following the June 1 freight-all-kinds (FAK) increases that led to a sharp rise in rates, some ocean carriers have announced rate hikes and peak season surcharges for June 15. “The carriers might be overly ambitious and shooting a bit higher than what they’re realistically hoping to achieve, but at the same time, I wouldn’t feel comfortable advising a customer that the rates are going to go down,” Turner said. “We are in a tight enough market to say that the carriers will be able to defend some of the increases,” he added. Matthias Hansen, senior vice president of global ocean freight at France-based forwarder Geodis, also pointed to carriers shifting tonnage back to the trans-Pacific to take advantage of the high rates from China to the US. “There is something like 28 extra loaders moving out of Asia-Europe and I expect a shortage of equipment will emerge because there is such a big pull towards the US,” he told the Journal of Commerce. Hansen said although he was surprised at the strength of the Asia-Europe demand, he expects the strong volume will continue for “at least another two to three months.” Eling attributed part of the current rising demand to the fact that when the US imposed 145% tariffs on China and shippers paused orders, Chinese producers quickly looked for new markets and Asia-Europe was the biggest one. That led to rising demand on the trade that continued even after the mid-May pause. “When you consider [145%] tariffs from the US, Chinese producers need to find different markets to place their goods, and of course, Europe is a big market,” he said. “This is the natural consequence of the tariffs that we are seeing in the demand.” Contact Greg Knowler at greg.knowler@spglobal.com .

Maritime

Container Shipping News

Asia-Europe

Robust demand emerges on Asia-Europe ocean trade as peak season begins

<div class="phx-topic abstract-wrapper">Data shows the up and down movement of goods in recent months tied to changing US tariff policy. </div>

Data shows the up and down movement of goods in recent months tied to changing US tariff policy.

<div class="phx-topic">The US-Mexico border is seeing more frequent spikes and declines in freight volumes bound for the US as shippers try to navigate US tariffs. “We’re seeing ebbs and flows [in shipments] as people try to react to current conditions,” said Edward Habe, vice president of Mexico sales for Averitt, a regional less-than-truckload (LTL) carrier and logistics company based in Cookeville, Tennessee. Those ebbs and flows are clearly seen in monthly truck crossing data from the US Bureau of Transportation Statistics (BTS), with the number of northbound crossings rising 10.2% in January, dropping 6.3% in February, rising 12% in March and falling 4.5% in April. The ups and downs closely follow the introduction (Feb. 1), postponement (Feb. 3), reintroduction (March 4) and further postponement (March 6) of US tariffs on Mexico. Currently, the 25% tariff introduced in February is only imposed on goods that do not meet the US-Mexico-Canada trade agreement rules of origin for North American products. “We saw a huge push in preparation for the tariffs,” said Habe, whose company has four freight facilities along the US-Mexico border. “We opened an 85,000-square-foot fulfillment center in San Antonio late last year and in two months it was half filled by two companies.” At the end of May, Averitt saw another push that is starting to wane in June, Habe said, adding, “Shippers are trying to play a waiting game to see what happens with these tariffs.” Overall, that has constrained growth at four of the eight largest US-Mexico truck border crossings, pulling their collective northbound truck count down 3.5% year over year in the first quarter, while total US-bound truck crossings rose 1.3% in the same period. With each new tariff announcement from President Donald Trump, “we saw a lot of people trying to export as soon as possible,” said Gabriel Guajardo, director of the southern border for Echo Global Logistics. Now, “everyone’s holding their breath,” he added. Most of the eight largest US-Mexico truck crossings saw US-bound volumes rise or fall between a 3.1% loss and a 4.4% gain in the first quarter, the BTS data showed. The BTS does not track Mexico-bound volumes, but the ratio of northbound to southbound loads is generally 3:1 or 4:1, and even higher in peak seasons, such as produce season. At Laredo, Texas, the largest US border crossing for trucks, US-bound volumes in the first quarter declined 1.8% from a year ago. Volumes fell 2.8% in El Paso and Ysleta, Texas, and 3.1% in Brownsville. First-quarter volumes were flat in Hidalgo, Texas, but up 2% in Calexico East, California, and 4.4% higher in Nogales, Arizona. <h3>Beer flows north </h3>The border crossings at Eagle Pass, Texas, and Otay Mesa, California, were outliers on both ends of the spectrum. Growing US demand for Mexican beers helped push up northbound trucks entering the US through Eagle Pass by 49.2% year over year in the first quarter to 81,362 trucks. And the taps through which beers such as Modelo Especial flow on their way north are opening wider. Eagle Pass saw beer imports by value surge 10.9% last year to more than $1 billion, port statistics show. That increase is attributed to Constellation Brands, which imports and distributes Grupo Modelo beers in the US. In its fiscal year ending Feb. 28, publicly owned Constellation increased its beer shipments of 24-pack cases by 13.7 million, to 431.8 million. It helps that Grupo Modelo has a brewery in Piedras Negras, directly across the border from Eagle Pass. “That’s been a game changer for Eagle Pass,” Habe said. In contrast, northbound truck volumes at Otay Mesa, the port linking Mexico’s Baja California with Southern California, tumbled 34.9% in the first quarter from a year earlier, a drop blamed by logistics executives in part on high US tariffs on China as well as Mexico. “Otay Mesa production is focused around hi-tech assembly, such as flat screen televisions,” said Jordan Dewart, president of Mexico for Redwood Logistics. “The component parts come in via US ports and then are trucked down to Mexico,” he said. “I imagine they were hit hard by tariffs on goods from China and Southeast Asia.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

The US-Mexico border is seeing more frequent spikes and declines in freight volumes bound for the US as shippers try to navigate US tariffs. “We’re seeing ebbs and flows [in shipments] as people try to react to current conditions,” said Edward Habe, vice president of Mexico sales for Averitt, a regional less-than-truckload (LTL) carrier and logistics company based in Cookeville, Tennessee. Those ebbs and flows are clearly seen in monthly truck crossing data from the US Bureau of Transportation Statistics (BTS), with the number of northbound crossings rising 10.2% in January, dropping 6.3% in February, rising 12% in March and falling 4.5% in April. The ups and downs closely follow the introduction (Feb. 1), postponement (Feb. 3), reintroduction (March 4) and further postponement (March 6) of US tariffs on Mexico. Currently, the 25% tariff introduced in February is only imposed on goods that do not meet the US-Mexico-Canada trade agreement rules of origin for North American products. “We saw a huge push in preparation for the tariffs,” said Habe, whose company has four freight facilities along the US-Mexico border. “We opened an 85,000-square-foot fulfillment center in San Antonio late last year and in two months it was half filled by two companies.” At the end of May, Averitt saw another push that is starting to wane in June, Habe said, adding, “Shippers are trying to play a waiting game to see what happens with these tariffs.” Overall, that has constrained growth at four of the eight largest US-Mexico truck border crossings, pulling their collective northbound truck count down 3.5% year over year in the first quarter, while total US-bound truck crossings rose 1.3% in the same period. With each new tariff announcement from President Donald Trump, “we saw a lot of people trying to export as soon as possible,” said Gabriel Guajardo, director of the southern border for Echo Global Logistics. Now, “everyone’s holding their breath,” he added. Most of the eight largest US-Mexico truck crossings saw US-bound volumes rise or fall between a 3.1% loss and a 4.4% gain in the first quarter, the BTS data showed. The BTS does not track Mexico-bound volumes, but the ratio of northbound to southbound loads is generally 3:1 or 4:1, and even higher in peak seasons, such as produce season. At Laredo, Texas, the largest US border crossing for trucks, US-bound volumes in the first quarter declined 1.8% from a year ago. Volumes fell 2.8% in El Paso and Ysleta, Texas, and 3.1% in Brownsville. First-quarter volumes were flat in Hidalgo, Texas, but up 2% in Calexico East, California, and 4.4% higher in Nogales, Arizona. Beer flows north The border crossings at Eagle Pass, Texas, and Otay Mesa, California, were outliers on both ends of the spectrum. Growing US demand for Mexican beers helped push up northbound trucks entering the US through Eagle Pass by 49.2% year over year in the first quarter to 81,362 trucks. And the taps through which beers such as Modelo Especial flow on their way north are opening wider. Eagle Pass saw beer imports by value surge 10.9% last year to more than $1 billion, port statistics show. That increase is attributed to Constellation Brands, which imports and distributes Grupo Modelo beers in the US. In its fiscal year ending Feb. 28, publicly owned Constellation increased its beer shipments of 24-pack cases by 13.7 million, to 431.8 million. It helps that Grupo Modelo has a brewery in Piedras Negras, directly across the border from Eagle Pass. “That’s been a game changer for Eagle Pass,” Habe said. In contrast, northbound truck volumes at Otay Mesa, the port linking Mexico’s Baja California with Southern California, tumbled 34.9% in the first quarter from a year earlier, a drop blamed by logistics executives in part on high US tariffs on China as well as Mexico. “Otay Mesa production is focused around hi-tech assembly, such as flat screen televisions,” said Jordan Dewart, president of Mexico for Redwood Logistics. “The component parts come in via US ports and then are trucked down to Mexico,” he said. “I imagine they were hit hard by tariffs on goods from China and Southeast Asia.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

Surface

Trucking News

US shippers ride ebb and flow of Mexican cross-border freight demand

<div class="phx-topic abstract-wrapper">Cargo landing at the country’s ports in July will be 20% higher than the forecast made just last month by the National Retail Federation and Hackett Associates. </div>

Cargo landing at the country’s ports in July will be 20% higher than the forecast made just last month by the National Retail Federation and Hackett Associates.

<div class="phx-topic">US retailers on Monday significantly upgraded import projections through August amid the temporary pauses in effect on the so-called reciprocal tariffs implemented by the Trump administration. Cargo landing at the country’s ports in July will be 20% higher than the <a href="https://www.joc.com/article/us-retailers-project-first-year-over-year-import-cut-in-19-months-as-tariffs-bite-6001817">forecast made in May</a> by the National Retail Federation (NRF) and Hackett Associates. Their June Global Port Tracker (GPT) shows the first upgrade to US import projections since February, before the first round of tariffs were announced in April. “Tariff reductions will lead to a surge in imports in June through August as importers take advantage of the various 90-day pauses,” Hackett Associates Founder Ben Hackett said. A pause on higher tariffs on most of the US’ trading partners is in effect until July 9, while the pause on the 145% tariff on imports from China is due to expire Aug. 14. The GPT’s updated forecast calls for July US imports of 2.13 million TEUs — up 20.3% from last month’s GPT but still well below the 2.32 million TEUs brought in during July 2024. Retailers expect August imports to reach 1.98 million TEUs, up 8.8% from May’s forecast. “[Shippers] are now looking to get those orders and cargo moving in order <a href="https://www.joc.com/article/ocean-carriers-bring-in-more-trans-pacific-container-services-amid-rate-surge-6012725">to bring as much merchandise</a> into the country as they can before the reciprocal tariff and additional China tariff pauses end in July and August,” said Jonathan Gold, NRF’s vice president for Supply Chain and Customs Policy. June import projections were also upgraded from the May GPT, with retailers expecting 17.5% higher volumes at 2.01 million TEUs. Preliminary May volumes of 1.91 million TEUs are expected to be 5.5% higher than forecast last month. <h3>A soft Q4 </h3>But the summer surge is expected to end given the uncertainty over what will happen once the temporary tariff reprieves expire. Retailers slightly downgraded import expectations for September to 1.78 million TEUs, which would also be a 21.6% drop compared with the year-ago month. And in its initial forecast for October, the GPT projects imports of 1.8 million TEUs, almost 20% lower than October 2024. “The peak for the winter holidays will come early this year, making it simultaneous with the peak for the back-to-school season,” Hackett said. “If higher tariffs are not delayed again, we can expect the final four months of the year to see declining volumes of imports.” The updated forecast brings the first-half projection for US imports to 12.54 million TEUs, up 3.4% from expectations made in May and 3.7% higher than actual first-half 2024 volumes. The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>.  </div>

US retailers on Monday significantly upgraded import projections through August amid the temporary pauses in effect on the so-called reciprocal tariffs implemented by the Trump administration. Cargo landing at the country’s ports in July will be 20% higher than the forecast made in May by the National Retail Federation (NRF) and Hackett Associates. Their June Global Port Tracker (GPT) shows the first upgrade to US import projections since February, before the first round of tariffs were announced in April. “Tariff reductions will lead to a surge in imports in June through August as importers take advantage of the various 90-day pauses,” Hackett Associates Founder Ben Hackett said. A pause on higher tariffs on most of the US’ trading partners is in effect until July 9, while the pause on the 145% tariff on imports from China is due to expire Aug. 14. The GPT’s updated forecast calls for July US imports of 2.13 million TEUs — up 20.3% from last month’s GPT but still well below the 2.32 million TEUs brought in during July 2024. Retailers expect August imports to reach 1.98 million TEUs, up 8.8% from May’s forecast. “[Shippers] are now looking to get those orders and cargo moving in order to bring as much merchandise into the country as they can before the reciprocal tariff and additional China tariff pauses end in July and August,” said Jonathan Gold, NRF’s vice president for Supply Chain and Customs Policy. June import projections were also upgraded from the May GPT, with retailers expecting 17.5% higher volumes at 2.01 million TEUs. Preliminary May volumes of 1.91 million TEUs are expected to be 5.5% higher than forecast last month. A soft Q4 But the summer surge is expected to end given the uncertainty over what will happen once the temporary tariff reprieves expire. Retailers slightly downgraded import expectations for September to 1.78 million TEUs, which would also be a 21.6% drop compared with the year-ago month. And in its initial forecast for October, the GPT projects imports of 1.8 million TEUs, almost 20% lower than October 2024. “The peak for the winter holidays will come early this year, making it simultaneous with the peak for the back-to-school season,” Hackett said. “If higher tariffs are not delayed again, we can expect the final four months of the year to see declining volumes of imports.” The updated forecast brings the first-half projection for US imports to 12.54 million TEUs, up 3.4% from expectations made in May and 3.7% higher than actual first-half 2024 volumes. The GPT is published monthly using import data collected from 13 ports on the US East, West and Gulf coasts. Contact Laura Robb at laura.robb@spglobal.com . 

Pause on tariffs prompts US retailers to upgrade summer import forecast

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The world of LTL is slow to embrace change. Business anachronisms permeate current supply chain processes. These vestiges of the way things used to work define the LTL freight transportation procurement process of many modern shippers.David Knuth, logistics specialist at IEWC, a global supplier of cable and wire based in Wisconsin, is happy to have modernized the RFP process, automating the entire LTL bidding procedure with Bid$ense, SMC³’s automated truckload and LTL freight transportation sourcing solution. But when prompted, he can still recall what once was.In his previous job, a large part of his duties were consumed by creating an intermodal bid package for carriers. In a spreadsheet, Knuth detailed the company’s volumes lane by lane, taking care to delete any errant keystrokes or misleading data. He would then email out the information to each carrier, taking time to respond to detailed technical questions about the spreadsheet data. Finally, he had to compile all the results, create an algorithm that would compare the carriers on each lane, and award the business.“It was a huge undertaking. It took about four months to do,” Knuth said of the old process. “It was almost a full-time job for that part of the year, every year.”In his new job at IEWC, he sat down with Bid$ense on day one and was amazed at the capabilities. Knuth had never before used a bid tool. SMC³’s latest versions of Bid$ense automate the process even further, taking truckload and LTL RFPs entirely online. The tool draws on RFP best-practices protocols to streamline the bidding communication process, enabling bidding carriers to respond accurately and promptly to shipper requests. The solution also does all the distribution work automatically, electronically submitting shipper bid data to carriers based on their actual service capabilities and performance records. Carriers are alerted with timely prompts for RFP deliverables, so shippers aren’t waiting by the phone for responses.Another benefit of automating the process is the data-cleansing assistance. When Knuth sent spreadsheets to carriers, data errors might cloud the bidding process; he might have to resend data or simply accept a price that did not truly reflect the costs of doing business. Data cleansing is incredibly beneficial, he said.The spreadsheet technique also made bidding analysis an onerous task. Since Bid$ense automates and streamlines the entire RFP process, intensive examination is now simple. SMC³ knows that each bid has more than one best outcome. With uniform responses from each carrier, shippers can quickly rank results and create an unlimited quantity of what-if scenarios to make the optimal procurement decision.Jesse Burnett of Central Garden &amp; Pet experiences many of the same benefits. Founded in 1980, Central Garden &amp; Pet has spent the last three decades growing from a small garden supply company to a provider of a range of products from dog chews and bird seed to soil supplements and natural insecticides. For much of its life, the company shipped these disparate goods via LTL and truckload carriers to retailers throughout the country, relying on each business unit to negotiate directly with their freight transportation providers. This arrangement worked fairly well for a small company, but as Central Garden &amp; Pet expanded, leadership decided to consolidate decision making.Burnett helped centralize the transportation decision making in 2015 with SMC³’s Bid$ense. Before Bid$ense, every business unit operated independently as far as negotiating with carriers.“There were a lot of different things just floating around,” he said. “We didn’t have master agreements in place; no national pricing at all. The pricing from carriers was just all over the place, depending on where you were.”The transformations he saw with Bid$ense were immediate. Burnett has been using the tool about every other year since its implementation at the company. Central Garden and Pet’s $19.6 million 2019 LTL bid saved the company just more than 9 percent when compared to its historical average. For Burnett, though, bid automation extends far beyond savings.“We knew that we weren’t getting the best pricing offer from our carriers just because nothing was centralized,” he continued. “We knew that if we combined everything from all these business units and paired it with one corporate offering, then it would drive some cost benefit with it.”When the company initially decided to centralize bid procurement, executives researched a number of different methodologies and technologies. In the end, though, Burnett found that Bid$ense was both widespread and well known, and that his carrier partners already knew how to use the application. Burnett also highlighted the data-cleansing process as a major benefit, saying the rigorous process ensures that carriers always return the best price.“It definitely has helped drive savings,” he said. “Any time you go out there and you drive that competitiveness with the carriers and they know they’re in a bid environment, it seems to sharpen their pencils.”Transportation procurement is an integral part of the modern supply chain. With Bid$ense, shippers can develop a strategic implementation plan that saves them time and money, but also helps them create strong relationships with their carrier partners. These carriers appreciate the solution’s data-cleansing process; when carriers receive a complete shipment history and future volume forecast, they don’t have to guess on pricing. Carriers that receive more data from shippers get a complete picture of that shipper’s freight, allowing them to accurately plan instead of simply preparing for the worst-case scenario. Clean data presented through an automated system can lead to both bigger shipment savings and a lasting partnership between carrier and customer.Whether customers are looking to streamline over-the-road transportation bidding by automating the RFP process or create an entirely new, centralized sourcing process, Bid$ense has the analytical horsepower to get the job done.SMC³ 2020 Customer Case Study

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Shippers save money, time with automated transportation bidding tools

If there’s one immutable truth in the world of logistics, it’s this: LTL is an inherently complex form of transportation. Tariffs, rates, DIM weights, transit times — it’s enough to confuse even seasoned logistics professionals. The solution to this knowledge gap has historically been on-the-job training or university supply chain education, but for a variety of reasons there is now a pressing need for third-party, remote LTL training that prepares logistics workers for transportation success. Global Scope Can Overlook Local Intricacies In the past, professionals looking to move into a supply chain career learned about the basics of supply chain from universities. However, many of these college supply chain programs are now global in scope, focusing on worldwide supply chain management instead of the intricacies of specialized domestic transportation. And even these programs, which used to be widespread, are becoming less common. LTL is not an industry of broad-brush strokes; supply chain professionals really need a pointillistic understanding of the logistics of LTL in order to excel in the industry. Accelerating Need for Dedicated LTL Education This lack of specified training put the onus on employers to prepare new hires with the LTL knowledge needed to do their jobs. Dedicated LTL study is a necessity, not a luxury. At the same time, changes in LTL and the broader supply chain world are accelerating. The reliance on e-commerce has ballooned since the start of the pandemic, and last-mile LTL shipments and related e-commerce strains on the supply chain won’t diminish once social distancing abates. That genie isn’t going back into the bottle. So supply chain employers need logistics workers that are fully versed in all aspects of the industry, ready to solve unique shipping and delivery problems based on their extensive supply chain knowledge But why care about LTL? It’s been reported that some shippers in today’s world are no longer concerned with what mode is used to ship their goods. A Multimodal Approach Ensures On-Time Delivery This mode agnosticism means supply chain stakeholders have to be well versed in all modes of transportation. As unforeseen weather events and other disruptions, such as protests, become more common, savvy logistics employees will need to be armed with familiarity of all modes, not just the most popular, to ensure that freight is delivered on time, without damage, and in the most financially expedient way possible. Offerings like SMC³’s LTL online education courses cover a wide range of topics from LTL basics and operations to more advanced concepts like pricing analytics and transportation law. The company also has plans to continually refresh content, adding new expert presenters and taking the feedback of students to make the courses even better as time goes on. Learn more about&nbsp;<a href="https://logisticstrainingcenter.com/smc3-courses/" rel="noreferrer" class="joc_admin__link">SMC³’s LTL Online Education program</a>&nbsp;and view the 2021 hybrid schedule, featuring live industry experts,&nbsp;<a href="https://www.smc3.com/onlinelearning2021/" rel="noreferrer" class="joc_admin__link">here.</a>

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Filling the Supply Chain Education Gap with LTL Education Courses

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