<div class="phx-topic abstract-wrapper">The U.S. trade deficit hit a 16-month high in April as exports declined faster than imports, the Commerce Department reported.
 
</div>

The U.S. trade deficit hit a 16-month high in April as exports declined faster than imports, the Commerce Department reported.

<div>The U.S. trade deficit hit a 16-month high in April as exports declined faster than imports, the Commerce Department reported.Exports during April totaled $148.8 billion, down 0.7 percent from March, while imports slipped 0.4 percent to $189.1 billion. The result was a trade deficit of $40.3 billion in April, up 0.6 percent from March.The report increased economists&amp;rsquo; concerns about the strength of the economic recovery. A particular concern is the drop in the euro&amp;rsquo;s value against the dollar, a change that could weaken demand for U.S. exports to Europe.<a>U.S. Trade data</a>: By the Numbers.Economists have been forecasting an increased deficit...

The U.S. trade deficit hit a 16-month high in April as exports declined faster than imports, the Commerce Department reported. Exports during April totaled $148.8 billion, down 0.7 percent from March, while imports slipped 0.4 percent to $189.1 billion. The result was a trade deficit of $40.3 billion in April, up 0.6 percent from March. The report increased economists&rsquo; concerns about the strength of the economic recovery. A particular concern is the drop in the euro&rsquo;s value against the dollar, a change that could weaken demand for U.S. exports to Europe. U.S. Trade data : By the Numbers. Economists have been forecasting an increased deficit this year as consumers step up spending on imported goods. Through April, the trade deficit was running at an annual rate of $466.6 billion, up 25 percent from last year, when low oil prices and weak consumer demand held down imports. As usual, China accounted for nearly half of the trade deficit. The U.S. trade deficit with China increased 14.3 percent in April to $19.3 billion, the highest level since November. U.S. exports to China dropped 9.4 percent, reflecting declines in sales of soybeans, motor vehicles and parts and cotton. Imports from China rose 6.6 percent, led by increased sales of computers, household appliances and cell phones. --Contact Joseph Bonney at jbonney@joc.com .

Transport, Trade and Regulation News

Exports Drop, Trade Deficit Rises

<div class="phx-topic abstract-wrapper">Marine terminals are using the new longshore contract to tackle one of the port’s recurring problems, with the union’s support, as they look to boost efficiency at the biggest port along the US East Coast. </div>

Marine terminals are using the new longshore contract to tackle one of the port’s recurring problems, with the union’s support, as they look to boost efficiency at the biggest port along the US East Coast.

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<div class="phx-topic">Marine terminals at the Port of New York and New Jersey have made the first — albeit very small — cuts of chronically absent employees under terms outlined in the new local longshore contract, one of the main concessions employers won under the deal to boost productivity at the port. John Nardi, president of the Shipping Association of New York and New Jersey, which represents maritime employers at the port, said this week five local longshore workers were fired in January under the new unexcused absentee policy his group negotiated in the local contract with the International Longshoremen’s Association (ILA). The cuts are miniscule in relation to the port’s 4,400 ILA workers. But Nardi said the new policy’s message has had an impact by cutting absenteeism at the port in half since the new contract, something that employers have “fought for years to improve.” “We worked very closely with the ILA to fix some longstanding challenges,” Nardi said. “We had the full support of the ILA at the highest level. We’re not fooling around on this.” The ILA did not respond to a request for comment from the Journal of Commerce. The local contract was officially ratified last year as part of the master contract between the ILA and the United States Maritime Alliance, with the union securing a 62% increase in its top wage tier through 2030. The first year of that wage increase, along with a higher entry-level wage and manning changes, have resulted in a roughly 20% increase in labor costs for marine terminals since March 2025, according to a source familiar with the deal’s economics. <h3>Monday popular for absenteeism </h3>Absenteeism is a particular problem for the NY-NJ port relative to other East Coast ports, where longshore workers use hiring halls or telephonic dispatch to take any daily jobs listed as available at any of a port’s various facilities. NY-NJ maritime employers rely on specific longshore workers due to the different layout and equipment at each of its six container terminals. Marine terminals put out orders the day prior for how many longshore workers they need. ILA members at those terminals can then accept the day’s work, or it gets offered to someone else. Absenteeism can be particularly acute on Mondays. An ILA member may have worked at a time-and-half wage rate on the weekend but not show up for a shift at a regular time wage rate on Monday, despite having committed to that day’s work. “You can take a couple of days off for unanticipated reasons, but if you leave yourself in the system and accept a job, you need to take that job,” Nardi said. “You can’t just not show up without repercussions.” Under the new policy, longshore workers are allowed three days of unexcused absences each month. But unexcused absences following a weekend or a holiday count as one-and-half of those days, as do consecutive days of unexcused absences. The disciplinary escalation to firing is shortened under the new contract from seven unexcused absences to four. While longshore workers had a pass until the second unexcused absence for a warning letter, the first unexcused absence now results in a warning letter. Under the old contract, longshore workers were relegated to lower paying, dispatched jobs at the cruise and roll-on/roll-off terminals for several periods of time before a possible termination. But the new contract only offers one relegation period, followed by a two-week suspension and then firing. The new contract also has a stricter policy around longshore employees who unexpectedly leave work during their shift. <h3>Container move clause </h3>The new, local NY-NJ contract also has requirements that each longshore gang improve productivity by one container move each year, otherwise they lose seniority to another more productive gang. The number of longshore workers hired as standby relief went up under the new contract from three workers for every two jobs to two workers for every one job. However, Nardi said the additional relief has to be cost-neutral for employers and is contingent on productivity goals. Close to a year under the new contract, Nardi said the new absenteeism policy, along with the productivity measures, have resulted in a 7% increase in productivity at the port’s biggest terminals. He added that improved labor productivity aligns with the ILA’s goal of halting port automation. During contract negotiations, ILA President Harold Daggett also <a href="https://www.joc.com/article/ila-usmx-remain-at-odds-over-dockworker-wage-increases-daggett-5215515">appealed to the union’s rank-and-file</a> to improve their productivity due to the potential for job loss from automation. “If (the ILA is) focused on stemming the tide of automation, then people need to show up,” Nardi said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

Marine terminals at the Port of New York and New Jersey have made the first — albeit very small — cuts of chronically absent employees under terms outlined in the new local longshore contract, one of the main concessions employers won under the deal to boost productivity at the port. John Nardi, president of the Shipping Association of New York and New Jersey, which represents maritime employers at the port, said this week five local longshore workers were fired in January under the new unexcused absentee policy his group negotiated in the local contract with the International Longshoremen’s Association (ILA). The cuts are miniscule in relation to the port’s 4,400 ILA workers. But Nardi said the new policy’s message has had an impact by cutting absenteeism at the port in half since the new contract, something that employers have “fought for years to improve.” “We worked very closely with the ILA to fix some longstanding challenges,” Nardi said. “We had the full support of the ILA at the highest level. We’re not fooling around on this.” The ILA did not respond to a request for comment from the Journal of Commerce. The local contract was officially ratified last year as part of the master contract between the ILA and the United States Maritime Alliance, with the union securing a 62% increase in its top wage tier through 2030. The first year of that wage increase, along with a higher entry-level wage and manning changes, have resulted in a roughly 20% increase in labor costs for marine terminals since March 2025, according to a source familiar with the deal’s economics. Monday popular for absenteeism Absenteeism is a particular problem for the NY-NJ port relative to other East Coast ports, where longshore workers use hiring halls or telephonic dispatch to take any daily jobs listed as available at any of a port’s various facilities. NY-NJ maritime employers rely on specific longshore workers due to the different layout and equipment at each of its six container terminals. Marine terminals put out orders the day prior for how many longshore workers they need. ILA members at those terminals can then accept the day’s work, or it gets offered to someone else. Absenteeism can be particularly acute on Mondays. An ILA member may have worked at a time-and-half wage rate on the weekend but not show up for a shift at a regular time wage rate on Monday, despite having committed to that day’s work. “You can take a couple of days off for unanticipated reasons, but if you leave yourself in the system and accept a job, you need to take that job,” Nardi said. “You can’t just not show up without repercussions.” Under the new policy, longshore workers are allowed three days of unexcused absences each month. But unexcused absences following a weekend or a holiday count as one-and-half of those days, as do consecutive days of unexcused absences. The disciplinary escalation to firing is shortened under the new contract from seven unexcused absences to four. While longshore workers had a pass until the second unexcused absence for a warning letter, the first unexcused absence now results in a warning letter. Under the old contract, longshore workers were relegated to lower paying, dispatched jobs at the cruise and roll-on/roll-off terminals for several periods of time before a possible termination. But the new contract only offers one relegation period, followed by a two-week suspension and then firing. The new contract also has a stricter policy around longshore employees who unexpectedly leave work during their shift. Container move clause The new, local NY-NJ contract also has requirements that each longshore gang improve productivity by one container move each year, otherwise they lose seniority to another more productive gang. The number of longshore workers hired as standby relief went up under the new contract from three workers for every two jobs to two workers for every one job. However, Nardi said the additional relief has to be cost-neutral for employers and is contingent on productivity goals. Close to a year under the new contract, Nardi said the new absenteeism policy, along with the productivity measures, have resulted in a 7% increase in productivity at the port’s biggest terminals. He added that improved labor productivity aligns with the ILA’s goal of halting port automation. During contract negotiations, ILA President Harold Daggett also appealed to the union’s rank-and-file to improve their productivity due to the potential for job loss from automation. “If (the ILA is) focused on stemming the tide of automation, then people need to show up,” Nardi said. Contact Michael Angell at michael.angell@spglobal.com .

Port News

North American ports

Longshore labor

Maritime

NY-NJ port’s stricter absentee policy results in first longshore cuts 

<div class="phx-topic abstract-wrapper">The shock in spot market rates after the recent snowstorm and frigid temperatures has rivaled the severe winter weather of February 2021, which kickstarted an entire year of rising rates on shippers.</div>

The shock in spot market rates after the recent snowstorm and frigid temperatures has rivaled the severe winter weather of February 2021, which kickstarted an entire year of rising rates on shippers.

<div class="phx-topic">Spot truckload rates jumped in the days following a snowstorm that disrupted large portions of the US two weeks ago, driving a 40% week-over-week increase in spot market load posts, according to DAT Freight &amp; Analytics. Dry-van spot rates climbed 11 cents after snow and ice blanketed much of the eastern US, the largest seven-day increase in more than three years, DAT said. Spot prices for temperature-controlled capacity jumped 15 cents week over week, as shippers increasingly lean on refrigerated trucks to provide freeze protection during frigid conditions. “This storm stood out because it had an impact that was very similar to February 2021 when key freight routes turned into a skating rink,” Dean Croke, principal analyst for DAT, told the Journal of Commerce. “The only difference right now is that there is much less spot market capacity to absorb the disruption. There is no question in my mind there is less latent capacity, less buffer in the system.” The market reaction to the most recent storm has been more severe than is typically seen following hurricanes. After Hurricane Helene in September 2024, dry-van and temperature-controlled spot market loads increased 17%, while rates rose 4 cents week over week, according to DAT. Following Hurricane Ian in September 2022, dry-van load posts increased 2% and temperature-controlled load posts rose 10% week over week, but rates were largely unchanged. During the February 2021 ice storms, which caused widespread power outages in Texas, spot rates jumped roughly 20 cents during the two weeks afterward and then continued to climb through the remainder of the year. The disruption reset the market with spot rates rising steadily until the freight downturn began in 2022. <h3>Could the 2021 market trajectory repeat in 2026? </h3>Whether the current disruption evolves into a broader shift remains unclear. The Institute for Supply Management (ISM) manufacturing data for January flipped into expansion territory after more than a year of being below the baseline index of 50. Knight-Swift Transportation said <a href="https://www.joc.com/article/shippers-will-see-rates-climb-as-truckload-capacity-tightens-knight-swift-6156695">on its earnings call last month</a> that federal enforcement actions tied to non-domiciled commercial driver’s licenses (CDL) and English-language proficiency requirements are prompting shippers to rely more heavily on asset-based carriers with company drivers. According to the carrier, that shift could support volume growth and contract rate increases independent of broader economic conditions. Old Dominion Freight Lines also said it is <a href="https://www.joc.com/article/odfl-cautiously-optimistic-about-ltl-demand-despite-lackluster-q4-6164259">more optimistic</a> than it was three months ago, citing ISM data and discussions with less-than-truckload shippers as indicators that freight conditions could improve this year. Croke said those signals could point to the end of the freight recession and the emergence of a more carrier-favorable market. “If there is any truth to this non-domiciled CDL and English language proficiency stuff, it’s going to bite us even harder when produce season begins in the spring,” he said. “If we see an absolute roller coaster for reefer [temperature-controlled trucks], then it trickles down to dry-van, and I think the 2021 (storm) comparison becomes more valid for the rest of this year.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="13499d91-a088-4824-b1c4-db0f2c552702"></dynamic-object></div>Jason Miller, associate professor of supply chain management at Michigan State University, said he remains skeptical that current conditions will mirror the red-hot carrier market of 2021. “Looking back, 2021 was an unusual year with incredible consumer stimulus,” Miller told the Journal of Commerce. “If housing starts to improve, then there will be an actual recovery in freight volumes taking place and an expansionary pricing cycle sticking.” Permits for new single-family homes were down about 9% year over year on a seasonally adjusted basis as of October, according to the US Census Bureau, reflecting continued weakness in residential construction. Existing home sales were up roughly 1% year over year in December on a seasonally adjusted basis, according to the National Association of Realtors, indicating modest improvement but not a broad housing recovery. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

Spot truckload rates jumped in the days following a snowstorm that disrupted large portions of the US two weeks ago, driving a 40% week-over-week increase in spot market load posts, according to DAT Freight & Analytics. Dry-van spot rates climbed 11 cents after snow and ice blanketed much of the eastern US, the largest seven-day increase in more than three years, DAT said. Spot prices for temperature-controlled capacity jumped 15 cents week over week, as shippers increasingly lean on refrigerated trucks to provide freeze protection during frigid conditions. “This storm stood out because it had an impact that was very similar to February 2021 when key freight routes turned into a skating rink,” Dean Croke, principal analyst for DAT, told the Journal of Commerce. “The only difference right now is that there is much less spot market capacity to absorb the disruption. There is no question in my mind there is less latent capacity, less buffer in the system.” The market reaction to the most recent storm has been more severe than is typically seen following hurricanes. After Hurricane Helene in September 2024, dry-van and temperature-controlled spot market loads increased 17%, while rates rose 4 cents week over week, according to DAT. Following Hurricane Ian in September 2022, dry-van load posts increased 2% and temperature-controlled load posts rose 10% week over week, but rates were largely unchanged. During the February 2021 ice storms, which caused widespread power outages in Texas, spot rates jumped roughly 20 cents during the two weeks afterward and then continued to climb through the remainder of the year. The disruption reset the market with spot rates rising steadily until the freight downturn began in 2022. Could the 2021 market trajectory repeat in 2026? Whether the current disruption evolves into a broader shift remains unclear. The Institute for Supply Management (ISM) manufacturing data for January flipped into expansion territory after more than a year of being below the baseline index of 50. Knight-Swift Transportation said on its earnings call last month that federal enforcement actions tied to non-domiciled commercial driver’s licenses (CDL) and English-language proficiency requirements are prompting shippers to rely more heavily on asset-based carriers with company drivers. According to the carrier, that shift could support volume growth and contract rate increases independent of broader economic conditions. Old Dominion Freight Lines also said it is more optimistic than it was three months ago, citing ISM data and discussions with less-than-truckload shippers as indicators that freight conditions could improve this year. Croke said those signals could point to the end of the freight recession and the emergence of a more carrier-favorable market. “If there is any truth to this non-domiciled CDL and English language proficiency stuff, it’s going to bite us even harder when produce season begins in the spring,” he said. “If we see an absolute roller coaster for reefer [temperature-controlled trucks], then it trickles down to dry-van, and I think the 2021 (storm) comparison becomes more valid for the rest of this year.” Jason Miller, associate professor of supply chain management at Michigan State University, said he remains skeptical that current conditions will mirror the red-hot carrier market of 2021. “Looking back, 2021 was an unusual year with incredible consumer stimulus,” Miller told the Journal of Commerce. “If housing starts to improve, then there will be an actual recovery in freight volumes taking place and an expansionary pricing cycle sticking.” Permits for new single-family homes were down about 9% year over year on a seasonally adjusted basis as of October, according to the US Census Bureau, reflecting continued weakness in residential construction. Existing home sales were up roughly 1% year over year in December on a seasonally adjusted basis, according to the National Association of Realtors, indicating modest improvement but not a broad housing recovery. Contact Ari Ashe at ari.ashe@spglobal.com .

Trucking News

Truckload

Surface

Disruptive winter weather in US jolts spot truck rates to big gains

<div class="phx-topic abstract-wrapper">New Delhi has formed a consortium of six state-owned entities to push ahead with a plan to launch a large nationally-owned container carrier, to be known as the Bharat Container Shipping Line. </div>

New Delhi has formed a consortium of six state-owned entities to push ahead with a plan to launch a large nationally-owned container carrier, to be known as the Bharat Container Shipping Line.

<div class="phx-topic">India is making a formidable bid to counter the long-standing dominance of foreign-flagged container vessel fleets over its growing export/import trade, which arguably exposes domestic shippers to the vagaries of global supply/demand dynamics and shifting logistics patterns. New Delhi has formed a consortium of six state-owned entities, led by the national carrier Shipping Corporation of India (SCI), to advance a plan approved last October to launch the operation of a large nationally-owned container carrier that will be known as the Bharat Container Shipping Line (BCSL). The joint venture is primed to inject approximately $6.9 billion as an initial investment into the project, according to current indications. “This reinforces India’s strategic and commercial presence in global maritime trade,” a government statement said. “It strengthens India’s supply chains across maritime and logistics segments, reducing dependence on foreign operators.” Tentative plans call for acquiring 51 vessels in the initial phase and scaling tonnage capacity to over 400 ships in stages. The move was greeted with high optimism by local pro-export stakeholders who had been pushing Indian-flagged shipping capacity efforts, especially after the pandemic-linked supply chain mayhem. “The launch of BCSL is a timely and strategic step towards building India’s own maritime capacity,” Ajay Sahai, director general at the Federation of Indian Exports Organization (FIEO), told the Journal of Commerce. “Indian exporters have long faced challenges of freight volatility and capacity constraints. A domestic shipping line focused on India’s trade needs will enhance reliability, resilience and cost efficiency in our supply chains,” he said. <h3>Cabotage modification ended </h3>While the creation of BCSL is noteworthy and promises to stoke competition, it remains to be seen how the new entrant will be able to nurture network partnerships with large global carriers for long-haul services with end-to-end service reliability in a more consolidated industry. Currently, SCI, India’s only homegrown container line, has little to boast of as a long-haul operator due to a severely depleted box fleet — confined to just two 2008-built midsize vessels — and decades-long growth uncertainty caused by shifting government investment plans. With the exception of an India-Europe consortium deal with Mediterranean Shipping Co., the Indian liner’s trade participation is now largely relegated to short-sea or regional markets. Meanwhile, New Delhi has also signaled other protectionist postures. The 2018 <a href="https://www.joc.com/article/debate-over-india-cabotage-flares-again-5208366">cabotage modification</a> that allowed foreign-flag carriers to move containers intra-country freely was canceled last month because the reform failed to accomplish the policy objectives it had intended to advance, mainly domestic transshipment development and logistics cost improvements. “The withdrawal of cabotage relaxation does pose some challenges,” a Mumbai-based European carrier representative who didn’t want to be identified told the Journal of Commerce. “The [foreign] lines now need to ponder the consequences of altered operational fundamentals.” Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

India is making a formidable bid to counter the long-standing dominance of foreign-flagged container vessel fleets over its growing export/import trade, which arguably exposes domestic shippers to the vagaries of global supply/demand dynamics and shifting logistics patterns. New Delhi has formed a consortium of six state-owned entities, led by the national carrier Shipping Corporation of India (SCI), to advance a plan approved last October to launch the operation of a large nationally-owned container carrier that will be known as the Bharat Container Shipping Line (BCSL). The joint venture is primed to inject approximately $6.9 billion as an initial investment into the project, according to current indications. “This reinforces India’s strategic and commercial presence in global maritime trade,” a government statement said. “It strengthens India’s supply chains across maritime and logistics segments, reducing dependence on foreign operators.” Tentative plans call for acquiring 51 vessels in the initial phase and scaling tonnage capacity to over 400 ships in stages. The move was greeted with high optimism by local pro-export stakeholders who had been pushing Indian-flagged shipping capacity efforts, especially after the pandemic-linked supply chain mayhem. “The launch of BCSL is a timely and strategic step towards building India’s own maritime capacity,” Ajay Sahai, director general at the Federation of Indian Exports Organization (FIEO), told the Journal of Commerce. “Indian exporters have long faced challenges of freight volatility and capacity constraints. A domestic shipping line focused on India’s trade needs will enhance reliability, resilience and cost efficiency in our supply chains,” he said. Cabotage modification ended While the creation of BCSL is noteworthy and promises to stoke competition, it remains to be seen how the new entrant will be able to nurture network partnerships with large global carriers for long-haul services with end-to-end service reliability in a more consolidated industry. Currently, SCI, India’s only homegrown container line, has little to boast of as a long-haul operator due to a severely depleted box fleet — confined to just two 2008-built midsize vessels — and decades-long growth uncertainty caused by shifting government investment plans. With the exception of an India-Europe consortium deal with Mediterranean Shipping Co., the Indian liner’s trade participation is now largely relegated to short-sea or regional markets. Meanwhile, New Delhi has also signaled other protectionist postures. The 2018 cabotage modification that allowed foreign-flag carriers to move containers intra-country freely was canceled last month because the reform failed to accomplish the policy objectives it had intended to advance, mainly domestic transshipment development and logistics cost improvements. “The withdrawal of cabotage relaxation does pose some challenges,” a Mumbai-based European carrier representative who didn’t want to be identified told the Journal of Commerce. “The [foreign] lines now need to ponder the consequences of altered operational fundamentals.” Contact Bency Mathew at bencyvmathew@gmail.com .

Container lines

Container Shipping News

India advances launch of state container line after cabotage rule rewind

<div class="phx-topic abstract-wrapper">The carrier’s solid interim earnings through 2025 ensured a positive full-year result, but red ink made its first appearance in two years on the company’s quarterly balance sheet. </div>

The carrier’s solid interim earnings through 2025 ensured a positive full-year result, but red ink made its first appearance in two years on the company’s quarterly balance sheet.

<div class="phx-topic">The positive impact of the Gemini Cooperation network with partner Hapag-Lloyd that has carried through into 2026 will run into growing overcapacity exacerbated by a return to Suez Canal transits, Maersk CEO Vincent Clerc said Thursday. While Gemini’s rollout one year ago drove up Maersk’s annual volume, delivered significant cost savings across the network, and generated a record 2025 performance in its terminals division, Clerc warned the industry was heading into a downturn driven by excess capacity. “Whether it is through new ships that are coming in or through the return to Suez, we’re going to have an overcapacity of anywhere from 4% to 8% in 2026,” the CEO said during an earnings call that followed the release of Maersk’s fourth-quarter and 2025 financial results. “If we return fast and full to Suez, we will see more pressure on the freight rate because there is a bigger gap that we need to close at once,” Clerc added. “If we have an orderly, slow, gradual return, we might be able to manage it better.” While Maersk’s solid interim earnings through 2025 ensured a positive full-year result, red ink made its first appearance in two years on the carrier’s quarterly balance sheet. The company also announced it will cut 1,000 jobs this year. Maersk for the fourth quarter reported a $153 million loss in its container shipping segment as average rates fell 23% year over year to $2,046 per FEU, offsetting an 8% gain in volume to 3.4 million FEUs. Revenue in the fourth quarter of $13.3 billion was down 8.7% year over year, and earnings before interest, taxes, amortization and depreciation (EBITDA) fell 49% to $1.8 billion. Earnings before interest and taxes (EBIT) were down 94% at $100 million, while the carrier recorded zero net profit in the fourth quarter. For the full year, revenue dropped 2.7% year over year to $54 billion, EBITDA was down 21% at $9.5 billion, EBIT of $3.5 billion fell 46%, and net profit of $2.9 billion was down 53% compared with 2024. <h3>Potential loss flagged for 2026 </h3>The severe impact of overcapacity on the market was illustrated in Maersk’s 2026 profitability forecast. Faced with a return to the Suez and new ship deliveries adding to industry overcapacity, the carrier has flagged a potential $1.5 billion loss in its full-year EBIT earnings for 2026. It would be the first operating loss Maersk has booked in 10 years. The top end of the profit guidance was set at $1 billion, $2.5 billion less than last year’s result. With profitability falling and huge pressure on cost savings, the significant cost benefits achieved by Gemini in 2025 will be welcome. “We have generated over $300 million in benefits in the fourth quarter, and we are now targeting $820 [million] to $1.1 billion in annual benefits,” Clerc told analysts. He said network savings are generated by more efficient use of vessels by sailing at slower speeds over shorter distances between hub ports, transporting more volume with the same capacity, and having shorter dwell times at berth. The lower bunker consumption from these measures translated to a cost saving of $150 million in the fourth quarter alone. Gemini’s increased volume also had a highly positive impact on Maersk’s APM Terminals division, with fourth-quarter revenue of $1.4 billion that was up 13% year over year and volume increasing 8.4%, mainly on the Europe, North America and Latin America trade lanes. <h3>Strong global container demand </h3>The industry might be facing a growing overcapacity problem, but demand in 2026 is expected to grow between 2% and 4%; Maersk expects to grow its volume in line with the market. “As we look ahead to 2026, we see a continuation of strong global container demand translating into a volume growth that we expect to land between 2% and 4% based on various scenarios,” Clerc said. Maersk’s executives are also confident they have the tools in place to handle the imbalance in supply and demand. “We have a strong balance sheet to weather the downturn in ocean, [but] the unknown is how deep and how long will it last,” Maersk CFO Patrick Jany said on the call, highlighting the significant number of old vessels that were not economically viable at current rate levels. Jany said at some point, the unviable capacity would be scrapped, returned to charterers or idled. “I would expect this to happen this year, particularly in scenarios where the Red Sea reopens fully and fast, that will trigger every reaction,” he said. “Our view is not that we’ll have three years of pain, but more that you will have one or two years of pain, and then the capacity will be taken out.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The positive impact of the Gemini Cooperation network with partner Hapag-Lloyd that has carried through into 2026 will run into growing overcapacity exacerbated by a return to Suez Canal transits, Maersk CEO Vincent Clerc said Thursday. While Gemini’s rollout one year ago drove up Maersk’s annual volume, delivered significant cost savings across the network, and generated a record 2025 performance in its terminals division, Clerc warned the industry was heading into a downturn driven by excess capacity. “Whether it is through new ships that are coming in or through the return to Suez, we’re going to have an overcapacity of anywhere from 4% to 8% in 2026,” the CEO said during an earnings call that followed the release of Maersk’s fourth-quarter and 2025 financial results. “If we return fast and full to Suez, we will see more pressure on the freight rate because there is a bigger gap that we need to close at once,” Clerc added. “If we have an orderly, slow, gradual return, we might be able to manage it better.” While Maersk’s solid interim earnings through 2025 ensured a positive full-year result, red ink made its first appearance in two years on the carrier’s quarterly balance sheet. The company also announced it will cut 1,000 jobs this year. Maersk for the fourth quarter reported a $153 million loss in its container shipping segment as average rates fell 23% year over year to $2,046 per FEU, offsetting an 8% gain in volume to 3.4 million FEUs. Revenue in the fourth quarter of $13.3 billion was down 8.7% year over year, and earnings before interest, taxes, amortization and depreciation (EBITDA) fell 49% to $1.8 billion. Earnings before interest and taxes (EBIT) were down 94% at $100 million, while the carrier recorded zero net profit in the fourth quarter. For the full year, revenue dropped 2.7% year over year to $54 billion, EBITDA was down 21% at $9.5 billion, EBIT of $3.5 billion fell 46%, and net profit of $2.9 billion was down 53% compared with 2024. Potential loss flagged for 2026 The severe impact of overcapacity on the market was illustrated in Maersk’s 2026 profitability forecast. Faced with a return to the Suez and new ship deliveries adding to industry overcapacity, the carrier has flagged a potential $1.5 billion loss in its full-year EBIT earnings for 2026. It would be the first operating loss Maersk has booked in 10 years. The top end of the profit guidance was set at $1 billion, $2.5 billion less than last year’s result. With profitability falling and huge pressure on cost savings, the significant cost benefits achieved by Gemini in 2025 will be welcome. “We have generated over $300 million in benefits in the fourth quarter, and we are now targeting $820 [million] to $1.1 billion in annual benefits,” Clerc told analysts. He said network savings are generated by more efficient use of vessels by sailing at slower speeds over shorter distances between hub ports, transporting more volume with the same capacity, and having shorter dwell times at berth. The lower bunker consumption from these measures translated to a cost saving of $150 million in the fourth quarter alone. Gemini’s increased volume also had a highly positive impact on Maersk’s APM Terminals division, with fourth-quarter revenue of $1.4 billion that was up 13% year over year and volume increasing 8.4%, mainly on the Europe, North America and Latin America trade lanes. Strong global container demand The industry might be facing a growing overcapacity problem, but demand in 2026 is expected to grow between 2% and 4%; Maersk expects to grow its volume in line with the market. “As we look ahead to 2026, we see a continuation of strong global container demand translating into a volume growth that we expect to land between 2% and 4% based on various scenarios,” Clerc said. Maersk’s executives are also confident they have the tools in place to handle the imbalance in supply and demand. “We have a strong balance sheet to weather the downturn in ocean, [but] the unknown is how deep and how long will it last,” Maersk CFO Patrick Jany said on the call, highlighting the significant number of old vessels that were not economically viable at current rate levels. Jany said at some point, the unviable capacity would be scrapped, returned to charterers or idled. “I would expect this to happen this year, particularly in scenarios where the Red Sea reopens fully and fast, that will trigger every reaction,” he said. “Our view is not that we’ll have three years of pain, but more that you will have one or two years of pain, and then the capacity will be taken out.” Contact Greg Knowler at greg.knowler@spglobal.com .

Gemini benefits face looming challenge from oversupplied market: Maersk CEO

<div class="phx-topic abstract-wrapper">Power generation cargoes are on the rise amid surging demand linked to data centers, but cargo generated by oil projects will be on shakier ground in 2026. </div>

Power generation cargoes are on the rise amid surging demand linked to data centers, but cargo generated by oil projects will be on shakier ground in 2026.

<div class="phx-topic">A lumpy project cargo demand outlook through 2027 is creating a confused market, with a jagged split of “haves” and “have nots” when it comes to cargo commitments. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6164834_0.1.jpg"></img></div>According to data from S&amp;P Global Energy, global power demand is surging, impacted significantly by demand from data centers. The demand for power from these new installations has accelerated faster than most grids can accommodate, prompting demand not only for the equipment that will produce the extra power needed, but also for new infrastructure to renew the power grid in some regions, principally North America. Growth in demand for power from data centers is forecast to grow at an average annual rate of 13.5% through 2030 for the US alone, according to S&amp;P Global Energy. Growth in power demand from these installations for mainland China is forecast at a compound annual growth rate of 14.1% and at 10% for Europe. India is starting at a much lower base, but the forecast growth over the next five years is over 25% per year. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e4371a05-8ffc-4840-852c-9d7c41a4fb0c"></dynamic-object></div>Original equipment manufacturers have told the Journal of Commerce their factories are fully booked to produce turbines for the next few years. At the same time, ship operators with deck carriers and heavy-lift capability said they have fixed long-term contracts of affreightment for specialized tonnage. <h3>Mixed cargo demand picture </h3>Conversely, other sectors are not seeing the same levels of booming cargo demand. Crude oil prices are expected to remain at or below $60 per barrel for most of 2026, according to S&amp;P Global Energy, adversely impacting global exploration and production capital spending for 2026 and continuing the negative trend from 2024. Some of the largest decreases in expected spend for 2026 are in Europe (down 9.4%) North America (down 5%), and Asia-Pacific (down 5%). This is expected to lead to a drop in new rigs, both off and onshore, of almost 2% in 2026, according to S&amp;P Global Energy. The oil and gas sector is a significant driver of project cargo demand. Shippers and forwarders operating in this sector have confirmed to the Journal of Commerce that the cargo outlook is not as rosy as it is for the power generation sector. Some oil-related projects saw investors disappear in 2025, with little expectation that they will return in 2026, forwarders said. In the US, economic uncertainty persists, as do concerns over oil supply constraints and uncertainty regarding the latest round of US sanctions. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="a91a35c4-7675-4a37-9ee9-7c352444edc8"></dynamic-object></div>Inventory levels in 2026 are significantly above those seen in 2025 and production growth is forecast to outpace demand growth over the first quarter of 2026. S&amp;P Global Energy assumes that OPEC+ will halt production increases during 2026, but there is no expectation of a reduction in Russian production or exports. This has led S&amp;P Global Energy to forecast an average crude price for 2026 of $50-$60/barrel. Oil majors use an oil price benchmark closer to $70/barrel for investment commitments for exploration and production projects. <h3>MPV fleet supply remains tight </h3>Growth in the multipurpose vessel (MPV) fleet has been focused on the heavy-lift sector for the past few years, catering to those heavier power generation and wind cargoes. That sector of the fleet is expected to grow by an average annual rate of 4.1% through 2030, according to the Journal of Commerce. Newbuilding orders for the heavy-lift sector continue to trickle in and demolition levels remain low. For the MPV fleet, with heavy-lift capability below 250 tons, growth is projected at less than 1% per year over the same period. Demolition levels for this sector are marginally higher, mainly because this fleet is older, but there is also more competition for these cargoes, and rates are expected to remain at or below current levels for some time. In addition to the risk of falling oil and gas project investment, there are more unknowns that could destabilize parts of the MPV sector in 2026. When the Red Sea eventually reopens for all tonnage, there will be a 10% rise in MPV capacity, according to Journal of Commerce projections. Some of this may be mopped up by short-term port congestion upon reopening, but likely not enough to avoid overcapacity. The geopolitical outlook also remains uncertain, and tariffs continue to affect breakbulk and project cargo trade. That said, patchy cargo demand for some sectors of the fleet could work in shippers’ favor as there will be increased competition for the cargoes that are transported, forwarders say. Contact Susan Oatway at <a href="mailto:susan.oatway@spglobal.com">susan.oatway@spglobal.com</a>. </div>

A lumpy project cargo demand outlook through 2027 is creating a confused market, with a jagged split of “haves” and “have nots” when it comes to cargo commitments. According to data from S&P Global Energy, global power demand is surging, impacted significantly by demand from data centers. The demand for power from these new installations has accelerated faster than most grids can accommodate, prompting demand not only for the equipment that will produce the extra power needed, but also for new infrastructure to renew the power grid in some regions, principally North America. Growth in demand for power from data centers is forecast to grow at an average annual rate of 13.5% through 2030 for the US alone, according to S&P Global Energy. Growth in power demand from these installations for mainland China is forecast at a compound annual growth rate of 14.1% and at 10% for Europe. India is starting at a much lower base, but the forecast growth over the next five years is over 25% per year. Original equipment manufacturers have told the Journal of Commerce their factories are fully booked to produce turbines for the next few years. At the same time, ship operators with deck carriers and heavy-lift capability said they have fixed long-term contracts of affreightment for specialized tonnage. Mixed cargo demand picture Conversely, other sectors are not seeing the same levels of booming cargo demand. Crude oil prices are expected to remain at or below $60 per barrel for most of 2026, according to S&P Global Energy, adversely impacting global exploration and production capital spending for 2026 and continuing the negative trend from 2024. Some of the largest decreases in expected spend for 2026 are in Europe (down 9.4%) North America (down 5%), and Asia-Pacific (down 5%). This is expected to lead to a drop in new rigs, both off and onshore, of almost 2% in 2026, according to S&P Global Energy. The oil and gas sector is a significant driver of project cargo demand. Shippers and forwarders operating in this sector have confirmed to the Journal of Commerce that the cargo outlook is not as rosy as it is for the power generation sector. Some oil-related projects saw investors disappear in 2025, with little expectation that they will return in 2026, forwarders said. In the US, economic uncertainty persists, as do concerns over oil supply constraints and uncertainty regarding the latest round of US sanctions. Inventory levels in 2026 are significantly above those seen in 2025 and production growth is forecast to outpace demand growth over the first quarter of 2026. S&P Global Energy assumes that OPEC+ will halt production increases during 2026, but there is no expectation of a reduction in Russian production or exports. This has led S&P Global Energy to forecast an average crude price for 2026 of $50-$60/barrel. Oil majors use an oil price benchmark closer to $70/barrel for investment commitments for exploration and production projects. MPV fleet supply remains tight Growth in the multipurpose vessel (MPV) fleet has been focused on the heavy-lift sector for the past few years, catering to those heavier power generation and wind cargoes. That sector of the fleet is expected to grow by an average annual rate of 4.1% through 2030, according to the Journal of Commerce. Newbuilding orders for the heavy-lift sector continue to trickle in and demolition levels remain low. For the MPV fleet, with heavy-lift capability below 250 tons, growth is projected at less than 1% per year over the same period. Demolition levels for this sector are marginally higher, mainly because this fleet is older, but there is also more competition for these cargoes, and rates are expected to remain at or below current levels for some time. In addition to the risk of falling oil and gas project investment, there are more unknowns that could destabilize parts of the MPV sector in 2026. When the Red Sea eventually reopens for all tonnage, there will be a 10% rise in MPV capacity, according to Journal of Commerce projections. Some of this may be mopped up by short-term port congestion upon reopening, but likely not enough to avoid overcapacity. The geopolitical outlook also remains uncertain, and tariffs continue to affect breakbulk and project cargo trade. That said, patchy cargo demand for some sectors of the fleet could work in shippers’ favor as there will be increased competition for the cargoes that are transported, forwarders say. Contact Susan Oatway at susan.oatway@spglobal.com .

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