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<div class="phx-topic abstract-wrapper">The South Atlantic Chassis Pool 3.0 has received federal approval and should launch officially in 2023, but it will face a daunting challenge satisfying rising demand as discretionary cargo shifts from the West Coast to East Coast ports.</div>

The South Atlantic Chassis Pool 3.0 has received federal approval and should launch officially in 2023, but it will face a daunting challenge satisfying rising demand as discretionary cargo shifts from the West Coast to East Coast ports.

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<div>The US Federal Maritime Commission (FMC) has approved the formation of a chassis pool in the Southeast US covering three ports in Florida, Georgia, and North Carolina, a move port officials say will expand the fleet and improve the quality and reliability of the equipment necessary to move containerized cargo.The federal agency raised no objections after a 45-day review of the proposed South Atlantic Chassis Pool 3.0 (SACP 3.0) expired on Saturday, allowing the agreement, which runs until 2030, to enter into force. SACP 3.0 comprises port authorities in Jacksonville, Savannah, and Wilmington, North Carolina, a coalition of 10 ocean...

The US Federal Maritime Commission (FMC) has approved the formation of a chassis pool in the Southeast US covering three ports in Florida, Georgia, and North Carolina, a move port officials say will expand the fleet and improve the quality and reliability of the equipment necessary to move containerized cargo. The federal agency raised no objections after a 45-day review of the proposed South Atlantic Chassis Pool 3.0 (SACP 3.0) expired on Saturday, allowing the agreement, which runs until 2030, to enter into force. SACP 3.0 comprises port authorities in Jacksonville, Savannah, and Wilmington, North Carolina, a coalition of 10 ocean carriers, and chassis pool administrator Consolidated Chassis Management (CCM). SACP 3.0 will change the operating and administrative structure of the pool, and port officials hope those changes result in more high-quality, roadworthy chassis in the Southeast. The South Carolina Ports Authority, which will exit the pool in 2023, had long complained about the poor quality of the marine chassis and their propensity to breakdown, although it is now facing other potential roadblocks in launching its own pool as an alternative to SACP 3.0. In prior iterations of the SACP, CCM acted only as an administrator and chassis lessors supplied the chassis, many of which were of a lower quality. Lessors such as DCLI and TRAC Intermodal have said they were reluctant to deploy top-of-the-line equipment into the pool given that they were ceding control over customer service experience to a third party, CCM. Instead, DCLI and TRAC preferred to put their best equipment in US cities where they controlled all aspects of the customer experience. Under SACP 3.0, CCM will set the standards for the age and quality of the chassis in the pool by signing long-term lease agreements to control the equipment and assuming responsibility for any necessary repairs. Growing the pool will be as important as improving the quality of the chassis. The pool currently has about 60,000 chassis, but port officials across the Southeast acknowledge that number will have to grow between now and the end of the SACP 3.0 agreement in 2030. Acquiring additional equipment will be even more important if ports on the US West Coast continue to cede import share to the East and Gulf coasts , putting more pressure on major gateways such as Savannah to handle growing volumes without congestion related to chassis. In addition to the three Southeast US ports, SACP 3.0 will also cover CSX Transportation and Norfolk Southern Railway intermodal ramps in Alabama, Florida, Georgia, Mississippi, North Carolina, and parts of Tennessee. Contact Ari Ashe at ari.ashe@ihsmarkit.com and follow him on Twitter: @arijashe .

FMC gives green light to Southeast US chassis pool

<div class="phx-topic abstract-wrapper">The announced cuts come one month after WiseTech Global said it would be laying off 30% of its workforce over the next two years, also in an AI-related move. </div>

The announced cuts come one month after WiseTech Global said it would be laying off 30% of its workforce over the next two years, also in an AI-related move.

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<div class="phx-topic">Freightos on Thursday announced it is reducing its workforce by up to 15% in the near future as part of an effort to adapt to the fast-moving impact artificial intelligence (AI) is having on software development. The company, which provides global freight pricing, booking and procurement products to forwarders and shippers, said the cuts will affect around 55 positions in a mix of layoffs and cancelation of planned backfills. “With what’s happening with software and data in the industry around AI, we felt we needed to be set up for scalability long-term,” Freightos Chief Strategy Officer Ian Arroyo told the Journal of Commerce. “And to make sure our teams are structured in a more efficient and effective way going forward.” The announced cuts come one month after WiseTech Global, the largest provider of software to global logistics providers, <a href="https://www.joc.com/article/wisetech-says-to-cut-nearly-30-of-workforce-as-it-preps-for-ai-era-6175881">said it would be laying off 30% of its workforce</a> over the next two years, also in an AI-related move. Arroyo said publicly-traded Freightos had signaled in its fourth quarter 2025 earnings call in February, its first since founder Zvi Schreiber stepped down as CEO Jan. 31, that the company was shifting from a transactions-focused approach to a solutions-focused approach. Freightos, founded in 2012, had built its presence in ocean freight through a transactions-oriented marketplace before acquiring WebCargo, a pricing solutions provider in the air freight industry, in 2016. “The strategy going forward is we’re going to be solutions focused first, with transactions to come later as a result of that,” Arroyo said. “Our commitment is to be ready for profitability [by the end of 2026]. We’re supporting thousands of forwarders, including all of the top 20, and we needed to make some changes to the organization.” More broadly, a number of technology companies, from Oracle to Amazon to fintech solutions provider Block, have announced layoffs in light of the oncoming march of AI. In particular, the companies have cited AI agents as being able to replace roles in programming, product development, and customer service. Traditionally, layoffs at publicly traded companies have been seen as a negative, but more recently, markets have viewed such actions positively, as a sign of companies adapting to the realities of accommodating more digital workers. Arroyo agreed that was a factor in Freightos’ decision-making. “100 percent,” he said. “This is about rightsizing teams in light of the AI revolution. How we support and build and go to market, all of that has to adjust.” <h3>‘Difficult but...necessary’ decision </h3>Arroyo said that while it might be prudent for software users to be conservative about investment in AI given how fast the environment is moving, software vendors don’t have that luxury. “Maybe the head of global logistics can sit on the sidelines and wait right now,” he said. “But those of us actually building the software, we better be in a position that we can enable the shifts [customers] need or want to make, while ensuring the continuity of the backbones of what they run their businesses on.” Newly appointed Freightos CEO Pablo Pinillos emphasized that the layoffs will help the company reach its goal of being profitable by the end of the year. “These types of decisions are very difficult, but this is a necessary step to ensure Freightos is positioned for long-term, sustainable growth in a dynamic market,” Pinillos said in a statement Thursday. Freightos estimates it will incur approximately $1.3 million in one-time restructuring charges, primarily related to severance and employee benefits, over the first nine months of 2026. But it expects the restructuring to generate annualized cost savings of approximately $4.5 million starting in the fourth quarter of this year. The company had revenue of $29.5 million in 2025, a 24% increase year over year, while it posted an EBITDA loss of $11.2 million, compared to $12.6 million loss in 2024. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Freightos on Thursday announced it is reducing its workforce by up to 15% in the near future as part of an effort to adapt to the fast-moving impact artificial intelligence (AI) is having on software development. The company, which provides global freight pricing, booking and procurement products to forwarders and shippers, said the cuts will affect around 55 positions in a mix of layoffs and cancelation of planned backfills. “With what’s happening with software and data in the industry around AI, we felt we needed to be set up for scalability long-term,” Freightos Chief Strategy Officer Ian Arroyo told the Journal of Commerce. “And to make sure our teams are structured in a more efficient and effective way going forward.” The announced cuts come one month after WiseTech Global, the largest provider of software to global logistics providers, said it would be laying off 30% of its workforce over the next two years, also in an AI-related move. Arroyo said publicly-traded Freightos had signaled in its fourth quarter 2025 earnings call in February, its first since founder Zvi Schreiber stepped down as CEO Jan. 31, that the company was shifting from a transactions-focused approach to a solutions-focused approach. Freightos, founded in 2012, had built its presence in ocean freight through a transactions-oriented marketplace before acquiring WebCargo, a pricing solutions provider in the air freight industry, in 2016. “The strategy going forward is we’re going to be solutions focused first, with transactions to come later as a result of that,” Arroyo said. “Our commitment is to be ready for profitability [by the end of 2026]. We’re supporting thousands of forwarders, including all of the top 20, and we needed to make some changes to the organization.” More broadly, a number of technology companies, from Oracle to Amazon to fintech solutions provider Block, have announced layoffs in light of the oncoming march of AI. In particular, the companies have cited AI agents as being able to replace roles in programming, product development, and customer service. Traditionally, layoffs at publicly traded companies have been seen as a negative, but more recently, markets have viewed such actions positively, as a sign of companies adapting to the realities of accommodating more digital workers. Arroyo agreed that was a factor in Freightos’ decision-making. “100 percent,” he said. “This is about rightsizing teams in light of the AI revolution. How we support and build and go to market, all of that has to adjust.” ‘Difficult but...necessary’ decision Arroyo said that while it might be prudent for software users to be conservative about investment in AI given how fast the environment is moving, software vendors don’t have that luxury. “Maybe the head of global logistics can sit on the sidelines and wait right now,” he said. “But those of us actually building the software, we better be in a position that we can enable the shifts [customers] need or want to make, while ensuring the continuity of the backbones of what they run their businesses on.” Newly appointed Freightos CEO Pablo Pinillos emphasized that the layoffs will help the company reach its goal of being profitable by the end of the year. “These types of decisions are very difficult, but this is a necessary step to ensure Freightos is positioned for long-term, sustainable growth in a dynamic market,” Pinillos said in a statement Thursday. Freightos estimates it will incur approximately $1.3 million in one-time restructuring charges, primarily related to severance and employee benefits, over the first nine months of 2026. But it expects the restructuring to generate annualized cost savings of approximately $4.5 million starting in the fourth quarter of this year. The company had revenue of $29.5 million in 2025, a 24% increase year over year, while it posted an EBITDA loss of $11.2 million, compared to $12.6 million loss in 2024. Contact Eric Johnson at eric.johnson@spglobal.com .

Freightos to trim up to 15% of headcount amid AI adaptation process

<div class="phx-topic abstract-wrapper">The French liner is implementing changes to its Epic and Medex services due to operational complications caused by the war in the Persian Gulf. </div>

The French liner is implementing changes to its Epic and Medex services due to operational complications caused by the war in the Persian Gulf.

<div class="phx-topic">CMA CGM will add a new call at Colombo Port in Sri Lanka to its India–North Europe "Epic” loop and revamp its “Medex” India–Mediterranean route amid operational pressures due to the war in the Middle East. Both moves are effective from early April. The call at Colombo will enable CMA CGM to handle Pakistan shipments that it was previously transshipping via the Persian Gulf. The new Epic rotation will start with the CMA CGM Gemini’s arrival in Mundra, slated for April 3. The new rotation for Epic will call Mundra, Nhava Sheva, Colombo, Tangier Med, Southampton, Rotterdam, Hamburg, Antwerp, Le Havre, Algeciras and Nhava Sheva. Cosco Shipping is a vessel-sharing partner on the Epic, contributing three ships out of 10 vessels currently deployed on the rotation. The new Colombo call on the Epic loop will also allow CMA CGM to connect incremental volumes out of southern India by offering more reliable and faster transits than its existing coverage for the region via the “NEWMO” service out of Ennore Port (Chennai) that has longer roundtrip times. The reconfigured Medex, meanwhile, is due to begin westbound operations when the CMA CGM Ural arrives in Mundra on April 2. The changes to the route will introduce stops at Djibouti, Valencia and Fos-sur-Mer while dropping Abu Dhabi and Jebel Ali from the itinerary. Medex will call Mundra, Nhava Sheva, Colombo, Djibouti, Jeddah, Port Said, Valencia, Fos-sur-Mer, Genoa, Malta, Piraeus, Beirut, Port Said, Jeddah and Mundra. <h3>Rates on the rise </h3>Ocean rates on the India–Europe trade lane have more than doubled since the start of the war in the Middle East, according to forwarders. Sources put average spot booking rates from West India to North Europe at $3,000 to $3,200 per FEU, up from $1,400 to $1,500/FEU reported in late February. Local forwarder executives who spoke with the Journal of Commerce have linked the rate boost in large part to capacity disruptions along with the impact of emergency fuel fees now being levied by carriers. “We do not see the rate surge as a sign of a recovering market,” said an executive at a Mumbai-based forwarding house who didn’t want to be identified. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

CMA CGM will add a new call at Colombo Port in Sri Lanka to its India–North Europe "Epic” loop and revamp its “Medex” India–Mediterranean route amid operational pressures due to the war in the Middle East. Both moves are effective from early April. The call at Colombo will enable CMA CGM to handle Pakistan shipments that it was previously transshipping via the Persian Gulf. The new Epic rotation will start with the CMA CGM Gemini’s arrival in Mundra, slated for April 3. The new rotation for Epic will call Mundra, Nhava Sheva, Colombo, Tangier Med, Southampton, Rotterdam, Hamburg, Antwerp, Le Havre, Algeciras and Nhava Sheva. Cosco Shipping is a vessel-sharing partner on the Epic, contributing three ships out of 10 vessels currently deployed on the rotation. The new Colombo call on the Epic loop will also allow CMA CGM to connect incremental volumes out of southern India by offering more reliable and faster transits than its existing coverage for the region via the “NEWMO” service out of Ennore Port (Chennai) that has longer roundtrip times. The reconfigured Medex, meanwhile, is due to begin westbound operations when the CMA CGM Ural arrives in Mundra on April 2. The changes to the route will introduce stops at Djibouti, Valencia and Fos-sur-Mer while dropping Abu Dhabi and Jebel Ali from the itinerary. Medex will call Mundra, Nhava Sheva, Colombo, Djibouti, Jeddah, Port Said, Valencia, Fos-sur-Mer, Genoa, Malta, Piraeus, Beirut, Port Said, Jeddah and Mundra. Rates on the rise Ocean rates on the India–Europe trade lane have more than doubled since the start of the war in the Middle East, according to forwarders. Sources put average spot booking rates from West India to North Europe at $3,000 to $3,200 per FEU, up from $1,400 to $1,500/FEU reported in late February. Local forwarder executives who spoke with the Journal of Commerce have linked the rate boost in large part to capacity disruptions along with the impact of emergency fuel fees now being levied by carriers. “We do not see the rate surge as a sign of a recovering market,” said an executive at a Mumbai-based forwarding house who didn’t want to be identified. Contact Bency Mathew at bencyvmathew@gmail.com .

CMA CGM reorganizes India-Europe/Med network amid Middle East port woes 

<div class="phx-topic abstract-wrapper">An estimated 30% of Asia-Europe air cargo is routed via the Middle East, so the sudden closure of airspace in the Persian Gulf has left forwarders scrambling for capacity on freighters and passenger aircraft out of Asia. </div>

An estimated 30% of Asia-Europe air cargo is routed via the Middle East, so the sudden closure of airspace in the Persian Gulf has left forwarders scrambling for capacity on freighters and passenger aircraft out of Asia.

<div class="phx-topic">Air cargo out of Asia is capitalizing on airlines relocating capacity from the war-torn Middle East, but the rising demand for direct flights to Europe is being quickly snapped up by forwarders. An estimated 30% of Asia-Europe air cargo is routed via the Middle East and the sudden closure of airspace in the Persian Gulf left forwarders scrambling for capacity on freighters and passenger aircraft out of Asia. Darren Greene, head of air, ocean and customs at EFL Distribution, the Irish partner of Hong Kong-based U-Freight Group, said there was heavy demand for space on air freight services being rerouted through London, Frankfurt and Istanbul. “In addition to rising surcharges, freighter aircraft capacity is tightening significantly, with space becoming increasingly scarce on these new routes,” Greene told the Journal of Commerce. To handle the demand, Hong Kong-based Cathay Pacific has redirected capacity from canceled Dubai and Riyadh services to London, Paris and Zurich while increasing the size of aircraft on its Asia-Europe routes. Singapore Airlines has also suspended all flights to Dubai and increased its European services. While the additional capacity is predominantly aimed at providing lift for passengers unable to fly via the Middle East, the long-haul aircraft offer considerable below-deck cargo space. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="1f8878b6-9e77-46fc-bdf5-c1982da8007e"></dynamic-object></div>Despite the capacity additions from Asian carriers and European airlines adding Asia-Europe flights, rates that leveled off last week have started to climb again, possibly on reports of growing backlogs at key hubs and rising fuel costs, according to Freightos. Data from the online rate marketplace showed Southeast Asia-Europe prices are up 17% from last week at $5/kg, China-Europe rates jumped 25% to $5.01/kg, and China-US prices rose 9% to $7.28/kg. “While base freight rates remain stable, the introduction of fuel and war risk surcharges has created significant cost constraints,” Greene said. <h3>Fuel price rise outstripping rate increases </h3>The rate increases are being outstripped by rising fuel prices that before the war made up around 30% of an airline’s total operating costs. Global average jet fuel prices increased to $197 per barrel for the week ended March 20, up 25% on the previous week and more than double the last week of February, according to the latest price data published by the International Air Transport Association (IATA). Carriers have responded with fuel surcharges that are being revised regularly. Cathay Pacific tripled its fuel surcharge in mid-March to HK$12.9 per kilogram ($1.65) that will be valid until March 31. “If the steep increase of fuel costs cannot be effectively mitigated, we would not be able to sustain the effective operations of our network,” Cathay Pacific said in a statement Thursday. “To enable a more agile response to the volatile jet fuel prices, we will review and revise the fuel surcharge every two weeks to better capture jet fuel price movements in either upward or downward direction,” the carrier said. “This increased frequency of review is intended as a temporary measure and will be revisited when the Middle East situation stabilizes.” Singapore Airlines is charging CNY15/kg ($2.17) on long-haul shipments originating in China. Lufthansa Cargo will raise its fuel surcharge from €1.20/kg to €1.45 ($1.39 to $1.68) from March 30. Korean Air Cargo announced an "urgent adjustment" to its fuel surcharge policy effective April 1 without giving a surcharge price for cargo, while Maersk Air Freight has implemented emergency fuel surcharges and intermodal fuel fees because of the volatility in jet fuel prices. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Air cargo out of Asia is capitalizing on airlines relocating capacity from the war-torn Middle East, but the rising demand for direct flights to Europe is being quickly snapped up by forwarders. An estimated 30% of Asia-Europe air cargo is routed via the Middle East and the sudden closure of airspace in the Persian Gulf left forwarders scrambling for capacity on freighters and passenger aircraft out of Asia. Darren Greene, head of air, ocean and customs at EFL Distribution, the Irish partner of Hong Kong-based U-Freight Group, said there was heavy demand for space on air freight services being rerouted through London, Frankfurt and Istanbul. “In addition to rising surcharges, freighter aircraft capacity is tightening significantly, with space becoming increasingly scarce on these new routes,” Greene told the Journal of Commerce. To handle the demand, Hong Kong-based Cathay Pacific has redirected capacity from canceled Dubai and Riyadh services to London, Paris and Zurich while increasing the size of aircraft on its Asia-Europe routes. Singapore Airlines has also suspended all flights to Dubai and increased its European services. While the additional capacity is predominantly aimed at providing lift for passengers unable to fly via the Middle East, the long-haul aircraft offer considerable below-deck cargo space. Despite the capacity additions from Asian carriers and European airlines adding Asia-Europe flights, rates that leveled off last week have started to climb again, possibly on reports of growing backlogs at key hubs and rising fuel costs, according to Freightos. Data from the online rate marketplace showed Southeast Asia-Europe prices are up 17% from last week at $5/kg, China-Europe rates jumped 25% to $5.01/kg, and China-US prices rose 9% to $7.28/kg. “While base freight rates remain stable, the introduction of fuel and war risk surcharges has created significant cost constraints,” Greene said. Fuel price rise outstripping rate increases The rate increases are being outstripped by rising fuel prices that before the war made up around 30% of an airline’s total operating costs. Global average jet fuel prices increased to $197 per barrel for the week ended March 20, up 25% on the previous week and more than double the last week of February, according to the latest price data published by the International Air Transport Association (IATA). Carriers have responded with fuel surcharges that are being revised regularly. Cathay Pacific tripled its fuel surcharge in mid-March to HK$12.9 per kilogram ($1.65) that will be valid until March 31. “If the steep increase of fuel costs cannot be effectively mitigated, we would not be able to sustain the effective operations of our network,” Cathay Pacific said in a statement Thursday. “To enable a more agile response to the volatile jet fuel prices, we will review and revise the fuel surcharge every two weeks to better capture jet fuel price movements in either upward or downward direction,” the carrier said. “This increased frequency of review is intended as a temporary measure and will be revisited when the Middle East situation stabilizes.” Singapore Airlines is charging CNY15/kg ($2.17) on long-haul shipments originating in China. Lufthansa Cargo will raise its fuel surcharge from €1.20/kg to €1.45 ($1.39 to $1.68) from March 30. Korean Air Cargo announced an "urgent adjustment" to its fuel surcharge policy effective April 1 without giving a surcharge price for cargo, while Maersk Air Freight has implemented emergency fuel surcharges and intermodal fuel fees because of the volatility in jet fuel prices. Contact Greg Knowler at greg.knowler@spglobal.com .

Demand for direct Asia-Europe air cargo fills rerouted Middle East flights

<div class="phx-topic abstract-wrapper">Stocks that were already in the fuel supply chain and en route to refueling hubs when the Middle East conflict started have now been delivered, and those ports are running down their inventories.</div>

Stocks that were already in the fuel supply chain and en route to refueling hubs when the Middle East conflict started have now been delivered, and those ports are running down their inventories.

<div class="phx-topic">The availability of bunker fuel in Asia for ocean carriers is manageable for now but beginning to tighten, and global suppliers warn that shortages will be felt around the world should the Strait of Hormuz remain closed to ship traffic for much longer. Meanwhile, carriers are deploying a range of strategic operational and financial measures to mitigate the potential fuel shortages and the rising prices that will result. These include slow steaming to conserve fuel, filling ships in the US and Europe and transferring bunkers to Asia, and levying emergency fuel surcharges to recover rising costs. The implications of widening fuel shortages on container shipping operations could be profound, according to Erik Deventak, chief technology and data officer at rate benchmarking platform Xeneta. “In a worst-case scenario, any bunker shortage will hit supply because a carrier cannot run as many ships,” he said. “There’s no way around it and carriers will eventually need to reduce supply, likely through blank sailings.” While Deventak added a caveat — “realistically, no one is fully aware of what the scale of the bunker shortages could be” — he said the carriers would need to be selective on which services they were prepared to operate and which would be suspended. Hapag-Lloyd spokesperson Tim Seifert said the impact on the carrier’s operations so far was “limited and manageable,” but that Hapag was taking contingency measures to mitigate potential shortfalls. “We are taking on more fuel in ports where we would normally buy less to keep stock levels high,” he said. “As a fallback, we are considering bunker-only calls, but this has not been necessary so far.” About one-fifth of the world’s crude oil and refined products — 20 million barrels per day — is exported via the Strait of Hormuz, but that slowed to a trickle after the US and Israel began air strikes on Iran on Feb. 28. Export volumes of crude and refined products exiting the strait are currently at less than 10% of pre-war levels, forcing fuel suppliers across the region to reduce or shut down production. Bunker stocks that were already in the fuel supply chain and en route to refueling hubs when the war started have now been delivered, and those ports are running down their inventories. With Hormuz essentially unavailable to commercial shipping, there is no replenishment inbound. “If the Strait of Hormuz were to remain inaccessible, we would expect the market to tighten further — not only across Asia, but also into Europe and potentially parts of Africa,” Mikkel Kannegaard, head of global supply at Bunker Holding Group, the world’s largest bunker fuel supplier and trader, told the Journal of Commerce. “In Asia, availability remains acceptable so far, although supply uncertainty and backwardation are pushing up the delivery premiums,” he added. “At this stage, supply in Singapore and China appears to be holding up and looks manageable into April.” Backwardation is a market structure in which the spot price of a commodity is higher than its futures price, which can be a sign of supply disruptions. <h3>Emergency reserves inbound </h3>To address disruptions to oil markets stemming from the war in the Middle East, the 32 member countries of the International Energy Agency (IEA) on March 11 agreed to make 400 million barrels of oil from their emergency reserves available to the market. While the market has welcomed the measure, the fuel-strapped markets in Asia will not see the emergency reserves for at least two months, according to Sebastiaan Kosman, founder of bunker fuel analytics firm Spotbarge. “Even if you ship the oil now from the Amsterdam, Rotterdam, Antwerp area [known as ARA] to Asia, it will take two months to get the product loaded, shipped and refined,” Kosman said. Container shipping uses a range of different fuels, predominantly very low sulfur fuel oil (VLSFO), high sulfur fuel oil (HSFO) and low-sulfur marine gasoil (MGO). Liquefied natural gas (LNG) demand is increasing as more dual-fuel ships hit the water, but its usage depends on its price differential compared with conventional fuels, particularly MGO. Bunker fuel prices soared when the war began but have fallen over the past few days. The March 24 prices from Singapore assessed by industry platform Ship &amp; Bunker show VLSFO up 71% since late February at $894 per metric ton but down 10% since the start of the week. MGO is up 151% at $1,784/metric ton but has fallen 8% this week. The largest pricing decline was from HSFO. After rising 146% since the end of February to a high of $1,073/mt on March 9, the heavy fuel dropped steadily to $712/mt by March 24. Rotterdam fuel prices have also fallen this week and are substantially lower than Singapore. As of March 24, VLSFO was at $757/mt, up 54% compared with Feb. 27; MGO at $1,334/mt was almost double the pre-conflict level, and HSFO was up 63% at $714/mt, according to Ship &amp; Bunker. Kosman said Singapore’s crude oil comes from the Middle East and the supply chain disruption was widening the bunker fuel price differential between Singapore and Rotterdam. “That already gives you indication that Singapore is really tight,” he noted. “If Hormuz remains closed in the long term, bunkers in Singapore, Korea or Japan will be empty way earlier than terminals in Antwerp and Rotterdam.” <h3>Offsetting fuel price impact </h3>To recover bunker costs that comprise half their operating expenses, <a href="https://www.joc.com/article/war-reignites-tussle-between-ocean-carriers-cargo-owners-over-fuel-surcharges-6188632">carriers have rolled out emergency fuel surcharges</a> on top of the quarterly bunker adjustment factors (BAFs) that were no match for fuel prices that doubled in two weeks. Analysts at investment bank Jefferies said in a note to customers this week that rates would need to strengthen by 15% to fully offset the impact of rising fuel prices, which would be challenging given the <a href="https://www.joc.com/article/scrapping-strategy-looms-large-in-2026-as-carriers-manage-growing-oversupply-6168918">excess capacity in the market.</a>On Monday, the US Federal Maritime Commission <a href="https://www.joc.com/article/fmc-rejects-requests-by-carriers-to-waive-waiting-period-for-middle-east-surcharges-6191881">unanimously rejected separate requests from four ocean carriers</a> to waive a 30-day notice period to implement surcharges tied to the war in the Middle East, forcing the four to wait until early April to charge their shipper customers. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ef167537-108b-4e1b-ac11-43e99f815839"></dynamic-object></div>Meanwhile, spot rates on the Asia outbound trade lanes rose through March but have softened on Asia-Europe and flattened or even fallen on some trans-Pacific routes, according to the various pricing indexes tracked by the Journal of Commerce. Asia-North Europe rates this week are 41% above their pre-war levels at $2,800 per FEU, while Asia-Mediterranean rates are up 34% at $3,800/FEU, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. However, prices on both trade lanes softened in the past week. Although rates from Asia to the US West and East coasts rose in the first week of the war, they have since fallen below Feb. 28 levels. Deventak said although the rising price of fuel will drive up the price of shipping in the short term, he noted that the underlying market fundamentals remained in place — an oversupply of vessel capacity and demand that has been softened by a weak global economy. “We have seen the initial shock to container shipping, but the ultimate supply and demand structure has not massively changed since the conflict escalated, and it is this supply-demand balance that carries most weight in driving freight rates rather than carriers’ costs,” he said. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

The availability of bunker fuel in Asia for ocean carriers is manageable for now but beginning to tighten, and global suppliers warn that shortages will be felt around the world should the Strait of Hormuz remain closed to ship traffic for much longer. Meanwhile, carriers are deploying a range of strategic operational and financial measures to mitigate the potential fuel shortages and the rising prices that will result. These include slow steaming to conserve fuel, filling ships in the US and Europe and transferring bunkers to Asia, and levying emergency fuel surcharges to recover rising costs. The implications of widening fuel shortages on container shipping operations could be profound, according to Erik Deventak, chief technology and data officer at rate benchmarking platform Xeneta. “In a worst-case scenario, any bunker shortage will hit supply because a carrier cannot run as many ships,” he said. “There’s no way around it and carriers will eventually need to reduce supply, likely through blank sailings.” While Deventak added a caveat — “realistically, no one is fully aware of what the scale of the bunker shortages could be” — he said the carriers would need to be selective on which services they were prepared to operate and which would be suspended. Hapag-Lloyd spokesperson Tim Seifert said the impact on the carrier’s operations so far was “limited and manageable,” but that Hapag was taking contingency measures to mitigate potential shortfalls. “We are taking on more fuel in ports where we would normally buy less to keep stock levels high,” he said. “As a fallback, we are considering bunker-only calls, but this has not been necessary so far.” About one-fifth of the world’s crude oil and refined products — 20 million barrels per day — is exported via the Strait of Hormuz, but that slowed to a trickle after the US and Israel began air strikes on Iran on Feb. 28. Export volumes of crude and refined products exiting the strait are currently at less than 10% of pre-war levels, forcing fuel suppliers across the region to reduce or shut down production. Bunker stocks that were already in the fuel supply chain and en route to refueling hubs when the war started have now been delivered, and those ports are running down their inventories. With Hormuz essentially unavailable to commercial shipping, there is no replenishment inbound. “If the Strait of Hormuz were to remain inaccessible, we would expect the market to tighten further — not only across Asia, but also into Europe and potentially parts of Africa,” Mikkel Kannegaard, head of global supply at Bunker Holding Group, the world’s largest bunker fuel supplier and trader, told the Journal of Commerce. “In Asia, availability remains acceptable so far, although supply uncertainty and backwardation are pushing up the delivery premiums,” he added. “At this stage, supply in Singapore and China appears to be holding up and looks manageable into April.” Backwardation is a market structure in which the spot price of a commodity is higher than its futures price, which can be a sign of supply disruptions. Emergency reserves inbound To address disruptions to oil markets stemming from the war in the Middle East, the 32 member countries of the International Energy Agency (IEA) on March 11 agreed to make 400 million barrels of oil from their emergency reserves available to the market. While the market has welcomed the measure, the fuel-strapped markets in Asia will not see the emergency reserves for at least two months, according to Sebastiaan Kosman, founder of bunker fuel analytics firm Spotbarge. “Even if you ship the oil now from the Amsterdam, Rotterdam, Antwerp area [known as ARA] to Asia, it will take two months to get the product loaded, shipped and refined,” Kosman said. Container shipping uses a range of different fuels, predominantly very low sulfur fuel oil (VLSFO), high sulfur fuel oil (HSFO) and low-sulfur marine gasoil (MGO). Liquefied natural gas (LNG) demand is increasing as more dual-fuel ships hit the water, but its usage depends on its price differential compared with conventional fuels, particularly MGO. Bunker fuel prices soared when the war began but have fallen over the past few days. The March 24 prices from Singapore assessed by industry platform Ship & Bunker show VLSFO up 71% since late February at $894 per metric ton but down 10% since the start of the week. MGO is up 151% at $1,784/metric ton but has fallen 8% this week. The largest pricing decline was from HSFO. After rising 146% since the end of February to a high of $1,073/mt on March 9, the heavy fuel dropped steadily to $712/mt by March 24. Rotterdam fuel prices have also fallen this week and are substantially lower than Singapore. As of March 24, VLSFO was at $757/mt, up 54% compared with Feb. 27; MGO at $1,334/mt was almost double the pre-conflict level, and HSFO was up 63% at $714/mt, according to Ship & Bunker. Kosman said Singapore’s crude oil comes from the Middle East and the supply chain disruption was widening the bunker fuel price differential between Singapore and Rotterdam. “That already gives you indication that Singapore is really tight,” he noted. “If Hormuz remains closed in the long term, bunkers in Singapore, Korea or Japan will be empty way earlier than terminals in Antwerp and Rotterdam.” Offsetting fuel price impact To recover bunker costs that comprise half their operating expenses, carriers have rolled out emergency fuel surcharges on top of the quarterly bunker adjustment factors (BAFs) that were no match for fuel prices that doubled in two weeks. Analysts at investment bank Jefferies said in a note to customers this week that rates would need to strengthen by 15% to fully offset the impact of rising fuel prices, which would be challenging given the excess capacity in the market. On Monday, the US Federal Maritime Commission unanimously rejected separate requests from four ocean carriers to waive a 30-day notice period to implement surcharges tied to the war in the Middle East, forcing the four to wait until early April to charge their shipper customers. Meanwhile, spot rates on the Asia outbound trade lanes rose through March but have softened on Asia-Europe and flattened or even fallen on some trans-Pacific routes, according to the various pricing indexes tracked by the Journal of Commerce. Asia-North Europe rates this week are 41% above their pre-war levels at $2,800 per FEU, while Asia-Mediterranean rates are up 34% at $3,800/FEU, according to Platts, a sister company of the Journal of Commerce within S&P Global. However, prices on both trade lanes softened in the past week. Although rates from Asia to the US West and East coasts rose in the first week of the war, they have since fallen below Feb. 28 levels. Deventak said although the rising price of fuel will drive up the price of shipping in the short term, he noted that the underlying market fundamentals remained in place — an oversupply of vessel capacity and demand that has been softened by a weak global economy. “We have seen the initial shock to container shipping, but the ultimate supply and demand structure has not massively changed since the conflict escalated, and it is this supply-demand balance that carries most weight in driving freight rates rather than carriers’ costs,” he said. Contact Greg Knowler at greg.knowler@spglobal.com .

Bunker fuel shortages in Asia at tipping point as war disruption continues

<div class="phx-topic abstract-wrapper">The American Trucking Associations’ February truck tonnage report showed a 2.6% month-over-month increase, making it the largest sequential gain in three years.</div>

The American Trucking Associations’ February truck tonnage report showed a 2.6% month-over-month increase, making it the largest sequential gain in three years.

<div class="phx-topic">Soaring diesel fuel prices and the nationwide crackdown by the federal government on non-domiciled commercial drivers is tightening truckload capacity in the US, putting a floor under rates. And new data showing that demand may be perking up has raised hopes in the trucking industry, albeit cautiously, that the freight recession going on four years could be nearing an end. Still, trucking executives say for any recovery to be long-term, demand needs to show steady and solid growth over several months. The American Trucking Associations’ (ATA’s) February truck tonnage report showed a 2.6% month-over-month increase, making it the largest sequential gain in three years, according to Bob Costello, the group’s chief economist. On a year-over-year basis, the increase was 2.1%. “February’s robust gain is great to see, but the size of the gain is likely magnified due to lower industry capacity,” Costello said in a statement. “Particularly after a very prolonged freight recession, improving volumes in any manner is welcomed.” Capacity, meanwhile, is being crimped by diesel prices that have rocketed higher since the war in the Middle East began Feb. 28, forcing many small and midsize drivers to park their trucks given the fast-rising expense. The average price of on-highway diesel in the US jumped to almost $5.38 per gallon as of March 23, up 30 cents in one week and $1.80 higher than it was a year ago. Prices in California were at $6.87/gal. The sudden and steep increase in diesel is impacting capacity, according to Dean Croke, principal analyst for DAT Freight &amp; Analytics. “Diesel is up about $1.30 a gallon since the war started and that’s really crushed a lot of the small carriers because they haven’t been able to get the full fuel surcharge built into the loads,” Croke said. “A lot of carriers are saying they’re going to sit this out until things stabilize.” The latest information on rates from DAT showed that for the week ending March 21, dry van spot rates were flat week to week at $1.92 per mile. Reefer spot rates increased to $2.32 per mile, up 2 cents, and flatbed spot rates moved 3 cents higher to $2.34 per mile. DAT said as fuel surcharges have increased 44% to 64 cents per mile, carriers are struggling to negotiate load-by-load rate increases that fully offset the higher prices for diesel. “Capacity is tightening. It is putting a floor on rates that we’ve not seen in many years,” Croke said. “I suspect as you get into the spring building, construction and nursery season volume bump, you’ll see rates start to move up again.” <h3>CDLs culled in California </h3>Adding to the tightening capacity is the <a href="https://www.joc.com/article/capacity-cuts-fuel-shocks-provide-openings-for-trucking-and-rail-6188739">US Department of Transportation’s crackdown</a> on non-domiciled commercial driver’s licenses (CDLs) while toughening standards around the English language proficiency of all drivers. The Federal Motor Carrier Safety Administration (FMCSA) has canceled an estimated 13,000 CDLs in California. Raman Dillon, president of the 2,000-member North American Punjabi Trucking Association, said the loss of those drivers and high diesel prices will continue to tighten capacity in the state. “The drivers are suffering and the impact on the public and the supply chain has yet to be seen,” Dillon told the Journal of Commerce. “These CDLs were not picked up at a convenience store, they were issued by the government. You cannot say that every one of the 13,000 drivers they took out is a bad driver... “We feel like we are being made scapegoats, but it will tighten capacity, because our industry has a shortage of good drivers,” he added. Dillon agreed with Croke that high diesel prices will push drivers to the sidelines, at least for the time being, tightening capacity and impacting shippers by making it more costly and harder to find dependable ways to move freight. “We have diesel in some places being sold for seven dollars or more a gallon, and that’s a surcharge that you and me, we’re going to pay,” he said. “Everything is going to get more expensive.” <a href="https://www.joc.com/article/house-committee-advances-bill-targeting-non-domiciled-commercial-drivers-licenses-6188801">Legislation making its way through Congress</a>, meanwhile, contains several provisions that go far beyond the scope of the FMCSA’s rule restricting non-domiciled CDLs, which the agency estimates could remove up to 194,000 drivers from the market over five years. Still, the trucking industry is <a href="https://www.joc.com/article/impact-of-non-domiciled-cdl-enforcement-splits-us-trucking-sector-6135184">split on whether the federal regulations will significantly impact trucking and drayage capacity</a> amid the more than four-year freight recession. Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com</a>.</div>

Soaring diesel fuel prices and the nationwide crackdown by the federal government on non-domiciled commercial drivers is tightening truckload capacity in the US, putting a floor under rates. And new data showing that demand may be perking up has raised hopes in the trucking industry, albeit cautiously, that the freight recession going on four years could be nearing an end. Still, trucking executives say for any recovery to be long-term, demand needs to show steady and solid growth over several months. The American Trucking Associations’ (ATA’s) February truck tonnage report showed a 2.6% month-over-month increase, making it the largest sequential gain in three years, according to Bob Costello, the group’s chief economist. On a year-over-year basis, the increase was 2.1%. “February’s robust gain is great to see, but the size of the gain is likely magnified due to lower industry capacity,” Costello said in a statement. “Particularly after a very prolonged freight recession, improving volumes in any manner is welcomed.” Capacity, meanwhile, is being crimped by diesel prices that have rocketed higher since the war in the Middle East began Feb. 28, forcing many small and midsize drivers to park their trucks given the fast-rising expense. The average price of on-highway diesel in the US jumped to almost $5.38 per gallon as of March 23, up 30 cents in one week and $1.80 higher than it was a year ago. Prices in California were at $6.87/gal. The sudden and steep increase in diesel is impacting capacity, according to Dean Croke, principal analyst for DAT Freight & Analytics. “Diesel is up about $1.30 a gallon since the war started and that’s really crushed a lot of the small carriers because they haven’t been able to get the full fuel surcharge built into the loads,” Croke said. “A lot of carriers are saying they’re going to sit this out until things stabilize.” The latest information on rates from DAT showed that for the week ending March 21, dry van spot rates were flat week to week at $1.92 per mile. Reefer spot rates increased to $2.32 per mile, up 2 cents, and flatbed spot rates moved 3 cents higher to $2.34 per mile. DAT said as fuel surcharges have increased 44% to 64 cents per mile, carriers are struggling to negotiate load-by-load rate increases that fully offset the higher prices for diesel. “Capacity is tightening. It is putting a floor on rates that we’ve not seen in many years,” Croke said. “I suspect as you get into the spring building, construction and nursery season volume bump, you’ll see rates start to move up again.” CDLs culled in California Adding to the tightening capacity is the US Department of Transportation’s crackdown on non-domiciled commercial driver’s licenses (CDLs) while toughening standards around the English language proficiency of all drivers. The Federal Motor Carrier Safety Administration (FMCSA) has canceled an estimated 13,000 CDLs in California. Raman Dillon, president of the 2,000-member North American Punjabi Trucking Association, said the loss of those drivers and high diesel prices will continue to tighten capacity in the state. “The drivers are suffering and the impact on the public and the supply chain has yet to be seen,” Dillon told the Journal of Commerce. “These CDLs were not picked up at a convenience store, they were issued by the government. You cannot say that every one of the 13,000 drivers they took out is a bad driver... “We feel like we are being made scapegoats, but it will tighten capacity, because our industry has a shortage of good drivers,” he added. Dillon agreed with Croke that high diesel prices will push drivers to the sidelines, at least for the time being, tightening capacity and impacting shippers by making it more costly and harder to find dependable ways to move freight. “We have diesel in some places being sold for seven dollars or more a gallon, and that’s a surcharge that you and me, we’re going to pay,” he said. “Everything is going to get more expensive.” Legislation making its way through Congress , meanwhile, contains several provisions that go far beyond the scope of the FMCSA’s rule restricting non-domiciled CDLs, which the agency estimates could remove up to 194,000 drivers from the market over five years. Still, the trucking industry is split on whether the federal regulations will significantly impact trucking and drayage capacity amid the more than four-year freight recession. Contact Dan Ronan at contactdanronan@gmail.com .

Diesel shock puts floor under trucking rates as demand shows some life

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