<div class="phx-topic abstract-wrapper">US retailers benefited from higher inventory levels during Q3; however, the outlook through the end of the year remains uncertain following slowing growth in October retail sales.</div>

US retailers benefited from higher inventory levels during Q3; however, the outlook through the end of the year remains uncertain following slowing growth in October retail sales.

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<div>Whether a third wave of the COVID-19 pandemic will curb this holiday shopping season and unemployment benefits are extended — after an unexpectedly strong US retail spending over the last six months — will largely determine the strength of post-holiday restocking in the first half of 2021.It’s a tricky balancing act, in which some retailers are still smarting from stockouts after e-commerce demand hit record highs after importers canceled orders due to lockdowns closing brick-and-mortar stores. The National Retail Federation (NRF) expects holiday retail sales to increase between 3.5 percent and 4.1 percent while online sales are expected to grow...

Whether a third wave of the COVID-19 pandemic will curb this holiday shopping season and unemployment benefits are extended — after an unexpectedly strong US retail spending over the last six months — will largely determine the strength of post-holiday restocking in the first half of 2021. It’s a tricky balancing act, in which some retailers are still smarting from stockouts after e-commerce demand hit record highs after importers canceled orders due to lockdowns closing brick-and-mortar stores. The National Retail Federation (NRF) expects holiday retail sales to increase between 3.5 percent and 4.1 percent while online sales are expected to grow between 12 percent and 15 percent from 2019. The latest monthly Global Port Tracker Report, produced by Hackett Associates for the NRF, forecasts imports slowing in December and January on a year-over-year basis . The report projects an 8.2 percent decline in December imports and 3.7 percent drop in January ahead of Chinese New Year celebrations which begin Feb. 12. Carriers, forwarders, and non-vessel-operating common carriers (NVOs), however, tell JOC.com that US import volumes from Asia will remain elevated until the start of the New Year holidays, when Asian factory production shuts down for at least two weeks to celebrate. “The coming months will be influenced to a large extent by the coronavirus pandemic and whether it will be brought under control by the arrival of expected vaccines next year,” Ben Hackett, founder of Hackett Associates, said in a statement. NVOs have told JOC.com retailers are placing spring 2021 merchandise orders with factories to ensure the product is shipped before factories in Asia shut down for the Lunar New Year holidays. NVOs and carriers say import volumes could remain elevated until then. While US retail inventories began rebounding in September, they were still down 6 percent through the first nine months of the year, according to data from the US Census Bureau. South Korean container carrier HMM highlighted restocking as a driver of demand, and said in a statement that although the fourth quarter was the traditional slow season, inventory replenishment ahead of the year-end holidays and Chinese New Year would keep ships full . Supply chain ‘stress’ remains Still, the big question is how much retail inventory is expected? “It’s likely retail inventories will want to return to 2019 levels, but not to the 2019 inventory-to-sales ratio,” Jason Miller, associate professor of logistics at Michigan State University’s Eli Broad College of Business, told JOC.com. For clothing stores, such as Macy’s or Kohl’s, the US Census Bureau’s inventory-to-sales ratio declined from 2.39 in September 2019 to 2.33 in September 2020. By comparison, general merchandise stores such as Walmart and Target have seen greater improvements, with their September 2020 inventory-to-sales ratio falling to 1.28, down from 1.39 in September 2019. Click to enlarge . How much additional inventory retailers need will also depend on holiday season sales. US October retail sales were up only 0.3 percent from September, which was up 1.6 percent from August. With the winding down of certain provisions of the federal Coronavirus Aid, Relief, and Economic Security Act (CARES) Act, unemployment benefits will end for many consumers, which could result in a slowdown in December retail sales. “We started Q3 with inventory down about 3 percent compared with a year ago and ended more than 11 percent higher than a year ago, after a quarter in which our sales grew more than 20 percent,” John Mulligan, Target’s senior vice president and chief operating officer, said during the company’s Nov. 18 third-quarter earnings call. Likewise, Walmart ended the third quarter with inventories up 5.5 percent from a year ago due to pre-buying for the holidays and improvement of in-stock levels. But despite improvements in inventory, constraints persist. “There are still parts of the supply chain that are stressed by components that just haven't been available, including things like aluminum for cans. We still see some stress in things like bacon and breakfast foods,” John Furner, CEO of US Walmart, said during the company’s third-quarter earnings call Nov. 17. Home Depot’s inventory increased during the third quarter as well, with merchandise inventories up $444 million versus last year. The home improvement retailer turned its inventory over 5.9 times in Q3, up from 5.0 times a year earlier. “The in-stock level in our US stores has improved for 12 straight weeks,” Ted Decker, president and COO at Home Depot, said during the company’s Q3 earnings call last week. “While we are pleased with these results, we are not at pre-pandemic levels.” Macy’s and Kohl’s ended the third quarter with year-over-year inventory declines of 29 percent and 26 percent, respectively. Contact Cathy Morrow Roberson at Cathy.Morrowroberso@ihsmarkit.com and follow her on Twitter: @cmroberson06 .

Maritime

Port News

H1 retail restocking hinges on holiday sales, unemployment benefits

<div class="phx-topic abstract-wrapper">The less-than-truckload market is stabilizing, with opportunities for higher prices and profits in the second quarter, but the long-term outlook is still clouded by tariffs and geopolitical conflict.</div>

The less-than-truckload market is stabilizing, with opportunities for higher prices and profits in the second quarter, but the long-term outlook is still clouded by tariffs and geopolitical conflict.

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<div class="phx-topic">Fast-rising fuel costs and a long-awaited uptick in demand are pushing less-than-truckload (LTL) pricing toward record highs, adding to shipper supply chain costs. Even if fuel costs drop in coming weeks, shippers shouldn’t expect LTL rates to follow. Both the TD Cowen/AFS LTL Freight Index and the US long-haul LTL producer price index (PPI) last week jumped to record highs, with no sign of decline ahead. Anecdotal reports show daily shipment counts turning north after a long decline in 2024 and 2025. The LTL PPI rose 1.8% in March from February after climbing 0.8% month over month in February and 1.3% in January. On an annualized basis, the PPI rose 7.2% in March, compared with 5.3% and 5.2% year-over-year gains in February and January, respectively. The PPI is a measure of all-inclusive “selling prices,” and fuel surcharges certainly contributed to March’s gain. But LTL costs and rates have remained elevated since 2022, with carrier yield management balancing reduced volumes, according to AFS Logistics.<div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="8afcfdff-15ff-4ec3-8c50-af1aba47062e"></dynamic-object></div>Although the TD Cowen/AFS LTL Freight Index dropped slightly from the fourth quarter to the first quarter, the index rose year over year and is expected to climb to a new four-year high of 68.4% in the second quarter. “The LTL carriers are in a very unique position — their buckets are being filled from both ends,” said Andy Dyer, CEO of AFS, a third-party freight management company. Those “ends” are the truckload and parcel markets, both of which have seen substantial rate hikes, Dyer said. That’s pushing more freight to the LTL sector. Shippers are “managing the freight, not just paying the freight,” he said. That means they’re more willing to deconsolidate truckload shipments and consolidate parcel moves, and LTL rates that looked high last year now seem more reasonable. <h3>Persistent uncertainty </h3>It’s not clear if the increase in LTL demand will be long-lasting or short-term, or whether it signals a stronger industrial revival or tariff-related inventory reshuffling. For now, the LTL outlook — for providers — is brighter. At regional carrier Pitt Ohio, “bill count is picking up and now revenue is, too,” said Geoff Muessig, the company’s chief marketing officer. In the Northeast, the year got off to an “uneven start,” as successive winter storms swept the region, he said. In February, the Pittsburgh-based carrier saw better results, and demand got stronger in March through the start of the second quarter, Muessig said. “April’s bill count is solid,” he said. “Our same-store sales [shipments with existing customers] are rising. It’s a pleasant place to be.” The change is not a return to the heady years of 2021 through 2023, when post-COVID-19 demand and disruption from <a href="https://www.joc.com/article/ongoing-yellow-terminal-auction-seen-reshaping-a-smaller-us-ltl-sector-5200878">the failure of LTL provider Yellow</a> sent pricing up by double-digit percentages. But it’s a respite from the freight doldrums of 2023 to 2025. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="92fdaed8-3fc0-4c2e-930f-c63d25bb8976"></dynamic-object></div>An industrial uptick benefiting Pitt Ohio shows in Manufacturing Purchasing Managers’ Indexes (PMIs) from the Institute of Supply Management (ISM) and S&amp;P Global. The ISM PMI rose 0.3 percentage point to 52.7% in March, the third month for the PMI above the 50% no-change mark. ISM’s new order index remained positive but dropped from 55.8% in February to 53.5% last month. ISM’s production index was 55.1%. The S&amp;P Global US Manufacturing PMI has been above 50% since last August, and higher output and new orders pushed it up 0.7 percentage point to 52.3% in March. That gradual industrial expansion is putting more freight in LTL trailers. XPO and Saia, the US’ fourth- and sixth-largest LTL providers, respectively, both reported an annualized gain in daily shipments in February. Full first-quarter data will be available later this month. Daily shipment counts at FedEx Freight, the largest US LTL provider in terms of revenue, have fallen 14% since 2023 and dropped 5.7% year over year in the quarter that ended Feb. 28. But the company expects volume to grow again in the midterm. “There are absolutely GDP [gross domestic product] and PMI correlations, and as the market goes, we’ll feel that impact,” CFO Marshall W. Witt said during an <a href="https://www.joc.com/article/fedex-freight-plans-diversification-as-spin-off-date-approaches-6201281">April 8 investor day presentation</a> to Wall Street analysts. Carriers are vying more for profit than revenue or pure market share. “Profitable growth is now our North Star,” Witt said. “It aligns our decision-making in our organization around profitability rather than just revenue in isolation.” But they’re also looking for new sources of freight, beyond traditional industrial LTL shippers. LTL providers such as FedEx Freight are adjusting their freight mix, said AFS’ Dyer. “We’re seeing some mix changes in the stuff we’re handing to the LTLs,” he said. <h3>‘Not time to add capacity’ </h3>How long current volume trends will continue is an open question. The LTL market has improved, “but it’s a combination of truckload capacity coming out plus the fuel prices,” said Satish Jindel, president of SJ Consulting Group. “LTL carriers should be looking at this as a perfect time to ask how they can use the various forms of technology available right now, including AI [artificial intelligence], to handle more freight with the same physical network,” Jindel said. “It’s not a time to add capacity.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="16105334-c54a-4d51-9403-6d5bac8369c4"></dynamic-object></div>There are signs that higher LTL volume comes from inventory rebalancing, not new demand, said Keith Prather, managing director of Armada Corporate Intelligence. The US-Israel conflict with Iran may squeeze already lean inventories, putting pressure on supply chains and inbound freight, both globally and domestically, Prather said. “I’m not calling for a global supply chain crisis, but I do think stock-outs and some scrambling will take place over the next few quarters,” he said. The closure of the Strait of Hormuz “killed everything way upstream,” Prather said. “All of a sudden, you get inventories that are too lean.” That could spur demand but also crimp production and shipments. “Q2 has the potential to be robust, but do we pay for it in Q3?” he said. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

Fast-rising fuel costs and a long-awaited uptick in demand are pushing less-than-truckload (LTL) pricing toward record highs, adding to shipper supply chain costs. Even if fuel costs drop in coming weeks, shippers shouldn’t expect LTL rates to follow. Both the TD Cowen/AFS LTL Freight Index and the US long-haul LTL producer price index (PPI) last week jumped to record highs, with no sign of decline ahead. Anecdotal reports show daily shipment counts turning north after a long decline in 2024 and 2025. The LTL PPI rose 1.8% in March from February after climbing 0.8% month over month in February and 1.3% in January. On an annualized basis, the PPI rose 7.2% in March, compared with 5.3% and 5.2% year-over-year gains in February and January, respectively. The PPI is a measure of all-inclusive “selling prices,” and fuel surcharges certainly contributed to March’s gain. But LTL costs and rates have remained elevated since 2022, with carrier yield management balancing reduced volumes, according to AFS Logistics. Although the TD Cowen/AFS LTL Freight Index dropped slightly from the fourth quarter to the first quarter, the index rose year over year and is expected to climb to a new four-year high of 68.4% in the second quarter. “The LTL carriers are in a very unique position — their buckets are being filled from both ends,” said Andy Dyer, CEO of AFS, a third-party freight management company. Those “ends” are the truckload and parcel markets, both of which have seen substantial rate hikes, Dyer said. That’s pushing more freight to the LTL sector. Shippers are “managing the freight, not just paying the freight,” he said. That means they’re more willing to deconsolidate truckload shipments and consolidate parcel moves, and LTL rates that looked high last year now seem more reasonable. Persistent uncertainty It’s not clear if the increase in LTL demand will be long-lasting or short-term, or whether it signals a stronger industrial revival or tariff-related inventory reshuffling. For now, the LTL outlook — for providers — is brighter. At regional carrier Pitt Ohio, “bill count is picking up and now revenue is, too,” said Geoff Muessig, the company’s chief marketing officer. In the Northeast, the year got off to an “uneven start,” as successive winter storms swept the region, he said. In February, the Pittsburgh-based carrier saw better results, and demand got stronger in March through the start of the second quarter, Muessig said. “April’s bill count is solid,” he said. “Our same-store sales [shipments with existing customers] are rising. It’s a pleasant place to be.” The change is not a return to the heady years of 2021 through 2023, when post-COVID-19 demand and disruption from the failure of LTL provider Yellow sent pricing up by double-digit percentages. But it’s a respite from the freight doldrums of 2023 to 2025. An industrial uptick benefiting Pitt Ohio shows in Manufacturing Purchasing Managers’ Indexes (PMIs) from the Institute of Supply Management (ISM) and S&P Global. The ISM PMI rose 0.3 percentage point to 52.7% in March, the third month for the PMI above the 50% no-change mark. ISM’s new order index remained positive but dropped from 55.8% in February to 53.5% last month. ISM’s production index was 55.1%. The S&P Global US Manufacturing PMI has been above 50% since last August, and higher output and new orders pushed it up 0.7 percentage point to 52.3% in March. That gradual industrial expansion is putting more freight in LTL trailers. XPO and Saia, the US’ fourth- and sixth-largest LTL providers, respectively, both reported an annualized gain in daily shipments in February. Full first-quarter data will be available later this month. Daily shipment counts at FedEx Freight, the largest US LTL provider in terms of revenue, have fallen 14% since 2023 and dropped 5.7% year over year in the quarter that ended Feb. 28. But the company expects volume to grow again in the midterm. “There are absolutely GDP [gross domestic product] and PMI correlations, and as the market goes, we’ll feel that impact,” CFO Marshall W. Witt said during an April 8 investor day presentation to Wall Street analysts. Carriers are vying more for profit than revenue or pure market share. “Profitable growth is now our North Star,” Witt said. “It aligns our decision-making in our organization around profitability rather than just revenue in isolation.” But they’re also looking for new sources of freight, beyond traditional industrial LTL shippers. LTL providers such as FedEx Freight are adjusting their freight mix, said AFS’ Dyer. “We’re seeing some mix changes in the stuff we’re handing to the LTLs,” he said. ‘Not time to add capacity’ How long current volume trends will continue is an open question. The LTL market has improved, “but it’s a combination of truckload capacity coming out plus the fuel prices,” said Satish Jindel, president of SJ Consulting Group. “LTL carriers should be looking at this as a perfect time to ask how they can use the various forms of technology available right now, including AI [artificial intelligence], to handle more freight with the same physical network,” Jindel said. “It’s not a time to add capacity.” There are signs that higher LTL volume comes from inventory rebalancing, not new demand, said Keith Prather, managing director of Armada Corporate Intelligence. The US-Israel conflict with Iran may squeeze already lean inventories, putting pressure on supply chains and inbound freight, both globally and domestically, Prather said. “I’m not calling for a global supply chain crisis, but I do think stock-outs and some scrambling will take place over the next few quarters,” he said. The closure of the Strait of Hormuz “killed everything way upstream,” Prather said. “All of a sudden, you get inventories that are too lean.” That could spur demand but also crimp production and shipments. “Q2 has the potential to be robust, but do we pay for it in Q3?” he said. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

Surface

Truckload

Truck brokers

Freight returning to US LTL market as pricing, fuel costs climb higher

<div class="phx-topic abstract-wrapper">Some 320 gigawatts of new wind capacity are expected to be added worldwide between 2026 and 2030, comprising about 200 GW of onshore capacity and 123 GW offshore, according to a new report.</div>

Some 320 gigawatts of new wind capacity are expected to be added worldwide between 2026 and 2030, comprising about 200 GW of onshore capacity and 123 GW offshore, according to a new report.

<div class="phx-topic">A surge in wind energy development globally over the next five years is expected to buoy operators of multipurpose and specialist equipment installation vessels, industry analysts say. But the growth in offshore wind capacity is expected to exacerbate a looming shortage of installation vessels, especially those capable of transporting heavier and larger components, they added. Some 320 gigawatts of new wind capacity are expected to be added worldwide between 2026 and 2030, comprising about 200 GW of onshore capacity and 123 GW offshore, according to the Global Wind Energy Council’s (GWEC’s) latest annual survey, published Monday. New wind energy capacity is forecast to grow 5.2% a year over the next five years, Feng Zhao, GWEC’s head of strategy and market intelligence, told a webinar launching the report. The biggest onshore markets will be Europe, where a record 117 GW of new capacity will be installed between 2026 and 2030, followed by Africa and the Middle East with a combined 35 GW of new capacity, according to the report. About 25 GW of additional capacity is planned in Latin America, with Brazil, Chile, Mexico, Argentina and Colombia collectively accounting for 93% of the new onshore wind capacity in this region. Analysts speaking to the Journal of Commerce said the onshore projects will likely rely on multipurpose vessels (MPVs) to transport turbine blades and power generation equipment from manufacturers in Europe, China and India. <h3>China leads offshore capacity growth </h3>The biggest offshore markets in the forecast period are expected to be China, where 73 GW of new capacity will be added, and Europe, where more than 37 GW is expected to be fed into the grid between 2026 and 2030, the GWEC report said. In Europe, the key countries will be Britain, which is set to see 16 GW of new capacity — equivalent to 44% of Europe’s total over the next five years — while Germany will add 7.6 GW of offshore wind energy. Other countries that are planning significant offshore wind energy capacity growth are Poland (6 GW), the Netherlands (3.6 GW), France (1.7 GW) and Denmark (1.4 GW), the GWEC report said. In Asia, Taiwan is planning to add 6 GW of new capacity by 2030, followed by Japan and South Korea, which are both aiming for 3.2 GW of new capacity. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="38c07d12-e321-4b9f-8fda-25da31407805"></dynamic-object></div>Analysts said it will be offshore projects that will face vessel capacity constraints. Norway-headquartered offshore vessel operator Cadeler said the capacity crunch is set to hit in 2030 as new capacity installations are expected to peak. It said there are only 19 wind turbine installation vessels available capable of installing next-generation wind turbines of more than 15 megawatts.   Highlighting the potential shortage, Cadeler said in a commentary that new orders for turbine and foundation installation ships slumped 67% in the three years between the second quarter of 2023 and the first quarter of this year compared with the second quarter of 2020 to the first quarter of 2023 period. There were no new ship orders between July 2024 and the end of last year, with only one new deal in the first quarter for a wind turbine installation vessel that will target offshore wind projects in South Korea. Paris-headquartered offshore energy consultant Spinergie said in addition to vessel shortages and other supply chain constraints, projects developers have also faced challenges getting finance for their plans. In response, developers are increasingly structuring projects through joint ventures with investment funds to get final investment decision approval, Maélig Gaborieau, Spinerige’s senior offshore wind analyst, said in a commentary last month. That could lead to a raft of final investment decision approvals later this year for projects in South Korea, Japan and Taiwan, Gaborieau added. Contact Keith Wallis on <a href="mailto:keith.wallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

A surge in wind energy development globally over the next five years is expected to buoy operators of multipurpose and specialist equipment installation vessels, industry analysts say. But the growth in offshore wind capacity is expected to exacerbate a looming shortage of installation vessels, especially those capable of transporting heavier and larger components, they added. Some 320 gigawatts of new wind capacity are expected to be added worldwide between 2026 and 2030, comprising about 200 GW of onshore capacity and 123 GW offshore, according to the Global Wind Energy Council’s (GWEC’s) latest annual survey, published Monday. New wind energy capacity is forecast to grow 5.2% a year over the next five years, Feng Zhao, GWEC’s head of strategy and market intelligence, told a webinar launching the report. The biggest onshore markets will be Europe, where a record 117 GW of new capacity will be installed between 2026 and 2030, followed by Africa and the Middle East with a combined 35 GW of new capacity, according to the report. About 25 GW of additional capacity is planned in Latin America, with Brazil, Chile, Mexico, Argentina and Colombia collectively accounting for 93% of the new onshore wind capacity in this region. Analysts speaking to the Journal of Commerce said the onshore projects will likely rely on multipurpose vessels (MPVs) to transport turbine blades and power generation equipment from manufacturers in Europe, China and India. China leads offshore capacity growth The biggest offshore markets in the forecast period are expected to be China, where 73 GW of new capacity will be added, and Europe, where more than 37 GW is expected to be fed into the grid between 2026 and 2030, the GWEC report said. In Europe, the key countries will be Britain, which is set to see 16 GW of new capacity — equivalent to 44% of Europe’s total over the next five years — while Germany will add 7.6 GW of offshore wind energy. Other countries that are planning significant offshore wind energy capacity growth are Poland (6 GW), the Netherlands (3.6 GW), France (1.7 GW) and Denmark (1.4 GW), the GWEC report said. In Asia, Taiwan is planning to add 6 GW of new capacity by 2030, followed by Japan and South Korea, which are both aiming for 3.2 GW of new capacity. Analysts said it will be offshore projects that will face vessel capacity constraints. Norway-headquartered offshore vessel operator Cadeler said the capacity crunch is set to hit in 2030 as new capacity installations are expected to peak. It said there are only 19 wind turbine installation vessels available capable of installing next-generation wind turbines of more than 15 megawatts.   Highlighting the potential shortage, Cadeler said in a commentary that new orders for turbine and foundation installation ships slumped 67% in the three years between the second quarter of 2023 and the first quarter of this year compared with the second quarter of 2020 to the first quarter of 2023 period. There were no new ship orders between July 2024 and the end of last year, with only one new deal in the first quarter for a wind turbine installation vessel that will target offshore wind projects in South Korea. Paris-headquartered offshore energy consultant Spinergie said in addition to vessel shortages and other supply chain constraints, projects developers have also faced challenges getting finance for their plans. In response, developers are increasingly structuring projects through joint ventures with investment funds to get final investment decision approval, Maélig Gaborieau, Spinerige’s senior offshore wind analyst, said in a commentary last month. That could lead to a raft of final investment decision approvals later this year for projects in South Korea, Japan and Taiwan, Gaborieau added. Contact Keith Wallis on keithwallis@hotmail.com .

Container lines

Asia-Europe

Supply chain

Surge in global wind energy capacity growth to propel MPV volumes

<div class="phx-topic abstract-wrapper">Higher tariffs prompted importers to shift some manufacturing out of China last year, but other markets simply don’t have the expertise and capacity to wrest much more volume away from the still-dominant source for toys.</div>

Higher tariffs prompted importers to shift some manufacturing out of China last year, but other markets simply don’t have the expertise and capacity to wrest much more volume away from the still-dominant source for toys.

<div class="phx-topic">(The following story appears in the Top 100 Importers and Exporters issue of the Journal of Commerce magazine to be published May 4, 2026.) US toymakers increased their sales last year on lower import volumes by absorbing higher tariff costs rather than passing them on to consumers, according to industry analysts and executives. Overall US retail toy sales grew 6% in 2025, led primarily by games, puzzles, building sets and trading cards — such as Pokémon or Magic the Gathering — according to the Toy Association, an advocacy and research group representing toy manufacturers and retailers. Containerized imports of those products, however, fell 7.7%, according to PIERS, a sister company of the Journal of Commerce within S&amp;P Global. Greg Ahearn, president and CEO of the Toy Association, said sales were helped by a surge in spending in the early part of 2025 by adults buying toys for themselves, a boon to an industry that historically has relied heavily on holiday spending for children. “Our category is not recession-proof, but it is recession-resistant,” Ahearn said. “It’s the last thing that parents and caregivers will pull back on.” Ahearn estimates manufacturers absorbed approximately two-thirds of the higher tariffs imposed by the Trump administration to shield their customers from price hikes, while suppliers absorbed the other third. “Consumers maybe picked up 5% or so at the most,” he said. “Manufacturers looked very selectively at which products could support a price increase.” Instead, toymakers “redesigned” their supply chains to account for the rapid changes in tariff levels, Ahearn said. Potential refunds of tariffs paid under the International Emergency Economic Powers Act (IEEPA) will bolster toymakers and retailers, even as they brace for existing Section 122 tariffs of 10% through July, and the possibility of new tariffs resulting from ongoing Section 301 investigations. “Tariffs on toys fluctuated incredibly over a short period of time given that development of toys takes two years on average. They went from 30% to 70% before settling at 30% for most of last year,” he said, adding that he doesn’t “believe tariffs will go beyond 30%, even with” Section 301 tariffs. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="98baa24c-d299-426d-81c8-ed24f551c65a"></dynamic-object></div>Gina Goetter, CFO and COO at Hasbro, pegged the company’s tariff costs at $70 million for 2025. However, “supply chain productivity nearly offset the cost of tariffs,” including manufacturing diversification efforts, she said during Hasbro’s Feb. 10 earnings call. The company is forecasting $150 million in cost savings from supply chain initiatives in 2026. “Tariff costs will be relatively flat year over year in the back half [of this year], with much of the incremental cost landing in the front half of the year,” Goetter said. In Mattel’s Feb. 10 earnings call, CEO Ynon Kreiz said the toymaker’s 6% revenue growth in 2025 underperformed expectations due to “uncertainty in US trade dynamics that affected retailer ordering patterns.” “After two challenging quarters where US retailers delayed orders, there was a significant acceleration in orders through most of the fourth quarter,” Kreiz said. “December, however, ended up growing less than anticipated in the US and our full-year results finished below expectations.” <h3>Still made in China </h3>The choice to keep prices relatively stable inevitably impacted toymakers’ margins, forcing some companies to lay off staff and others to shut down. “Our members are made up of 90% small businesses,” Ahearn said. “Some of those went out of business, whether small retailers or manufacturers. The largest companies were getting creative and driving units. They looked at the way they were manufacturing; they looked at partnerships with retailers and adjusted on the fly to be able to hold price inflation to reasonable levels.” Part of “getting creative” meant reducing their reliance on China as the dominant source of imports, but there is only so much capacity for toymaking in alternative markets. China’s share of the US containerized toy import market slipped to 75.8% in 2025 after holding steady between 83% and 84% since the COVID-19 pandemic. Vietnam was the primary beneficiary of diversification away from China, growing its share to 10.6% last year from 6.1% in 2024. However, Ahearn said it would take at least a decade, in the best-case scenario, before manufacturers in Vietnam could produce toys at the same quality and quantity as China. Other markets in Asia, as well as Mexico and the US, likewise lack the necessary expertise and scale to wrest significant volume away from China. “That’s a skill base that needs to be rediscovered in the US,” he said. Toymakers also learned not to overreact to individual developments during last year’s tariff rollercoaster. “As tariffs rates changed, those that tried to get ahead of the curve because they had facilities in India and Vietnam and Mexico, they moved their production forecasts to India, only to discover India’s tariff is 50% and China’s is now 30%,” Ahearn said of the Trump administration imposing higher tariffs on India in mid-2025. Looking ahead to the rest of 2026, Ahearn said toy importers will be selling into a “pretty uncertain geopolitical and macroeconomic market,” in which an extended war in the Middle East could further increase manufacturing and transportation costs for shippers while dampening consumer spending. “Petroleum and oil are in everything,” he said. “That being a volatile component has everyone worried, in terms of the cost of components and movement of goods. But having come through the last year ... we don’t think the things that are driving growth are going to slow down, because they are built into people’s lives.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

(The following story appears in the Top 100 Importers and Exporters issue of the Journal of Commerce magazine to be published May 4, 2026.) US toymakers increased their sales last year on lower import volumes by absorbing higher tariff costs rather than passing them on to consumers, according to industry analysts and executives. Overall US retail toy sales grew 6% in 2025, led primarily by games, puzzles, building sets and trading cards — such as Pokémon or Magic the Gathering — according to the Toy Association, an advocacy and research group representing toy manufacturers and retailers. Containerized imports of those products, however, fell 7.7%, according to PIERS, a sister company of the Journal of Commerce within S&P Global. Greg Ahearn, president and CEO of the Toy Association, said sales were helped by a surge in spending in the early part of 2025 by adults buying toys for themselves, a boon to an industry that historically has relied heavily on holiday spending for children. “Our category is not recession-proof, but it is recession-resistant,” Ahearn said. “It’s the last thing that parents and caregivers will pull back on.” Ahearn estimates manufacturers absorbed approximately two-thirds of the higher tariffs imposed by the Trump administration to shield their customers from price hikes, while suppliers absorbed the other third. “Consumers maybe picked up 5% or so at the most,” he said. “Manufacturers looked very selectively at which products could support a price increase.” Instead, toymakers “redesigned” their supply chains to account for the rapid changes in tariff levels, Ahearn said. Potential refunds of tariffs paid under the International Emergency Economic Powers Act (IEEPA) will bolster toymakers and retailers, even as they brace for existing Section 122 tariffs of 10% through July, and the possibility of new tariffs resulting from ongoing Section 301 investigations. “Tariffs on toys fluctuated incredibly over a short period of time given that development of toys takes two years on average. They went from 30% to 70% before settling at 30% for most of last year,” he said, adding that he doesn’t “believe tariffs will go beyond 30%, even with” Section 301 tariffs. Gina Goetter, CFO and COO at Hasbro, pegged the company’s tariff costs at $70 million for 2025. However, “supply chain productivity nearly offset the cost of tariffs,” including manufacturing diversification efforts, she said during Hasbro’s Feb. 10 earnings call. The company is forecasting $150 million in cost savings from supply chain initiatives in 2026. “Tariff costs will be relatively flat year over year in the back half [of this year], with much of the incremental cost landing in the front half of the year,” Goetter said. In Mattel’s Feb. 10 earnings call, CEO Ynon Kreiz said the toymaker’s 6% revenue growth in 2025 underperformed expectations due to “uncertainty in US trade dynamics that affected retailer ordering patterns.” “After two challenging quarters where US retailers delayed orders, there was a significant acceleration in orders through most of the fourth quarter,” Kreiz said. “December, however, ended up growing less than anticipated in the US and our full-year results finished below expectations.” Still made in China The choice to keep prices relatively stable inevitably impacted toymakers’ margins, forcing some companies to lay off staff and others to shut down. “Our members are made up of 90% small businesses,” Ahearn said. “Some of those went out of business, whether small retailers or manufacturers. The largest companies were getting creative and driving units. They looked at the way they were manufacturing; they looked at partnerships with retailers and adjusted on the fly to be able to hold price inflation to reasonable levels.” Part of “getting creative” meant reducing their reliance on China as the dominant source of imports, but there is only so much capacity for toymaking in alternative markets. China’s share of the US containerized toy import market slipped to 75.8% in 2025 after holding steady between 83% and 84% since the COVID-19 pandemic. Vietnam was the primary beneficiary of diversification away from China, growing its share to 10.6% last year from 6.1% in 2024. However, Ahearn said it would take at least a decade, in the best-case scenario, before manufacturers in Vietnam could produce toys at the same quality and quantity as China. Other markets in Asia, as well as Mexico and the US, likewise lack the necessary expertise and scale to wrest significant volume away from China. “That’s a skill base that needs to be rediscovered in the US,” he said. Toymakers also learned not to overreact to individual developments during last year’s tariff rollercoaster. “As tariffs rates changed, those that tried to get ahead of the curve because they had facilities in India and Vietnam and Mexico, they moved their production forecasts to India, only to discover India’s tariff is 50% and China’s is now 30%,” Ahearn said of the Trump administration imposing higher tariffs on India in mid-2025. Looking ahead to the rest of 2026, Ahearn said toy importers will be selling into a “pretty uncertain geopolitical and macroeconomic market,” in which an extended war in the Middle East could further increase manufacturing and transportation costs for shippers while dampening consumer spending. “Petroleum and oil are in everything,” he said. “That being a volatile component has everyone worried, in terms of the cost of components and movement of goods. But having come through the last year ... we don’t think the things that are driving growth are going to slow down, because they are built into people’s lives.” Contact Eric Johnson at eric.johnson@spglobal.com .

Container Shipping News

US toymakers absorbing tariff costs, importing less to preserve sales

<div class="phx-topic abstract-wrapper">The ocean carrier said switching up Asia and US East Coast rotations on three trans-Pacific services will provide more reliability and consistency. </div>

The ocean carrier said switching up Asia and US East Coast rotations on three trans-Pacific services will provide more reliability and consistency.

<div class="phx-topic">Mediterranean Shipping Co. is reworking its trans-Pacific network starting next month to offer more reliable, direct China services into US Northeast and Southeast ports, while providing coastwide direct service from Southeast Asia. MSC said in a Thursday customer advisory that it is changing some port calls on its three main East Coast services to “enhance service reliability and schedule stability.” The new networks consolidate some China calls and will change some calls to Florida ports. MSC’s Empire Service will drop a Qingdao call, with the service now only calling Shanghai, Ningbo and Busan on the front haul. Empire’s US rotation will drop the ports of Jacksonville and Miami in favor of calls to Norfolk and Port Everglades on the backhaul. The service’s new rotation will commence with the scheduled May 27 departure of the 6,178-TEU MSC Leo VI from Shanghai. The carrier said Empire would be “less exposed to port congestion risks” due to the rotation change. Qingdao will be added to MSC’s Amberjack service into the US Southeast. However, MSC will no longer provide direct service from Yantian and Xiamen but instead focus the service on northeast Asia ports. The service will also replace a call to Norfolk with a call to Jacksonville. MSC said the Amberjack changes would improve transit times and network stability. The new rotation goes into effect with the service’s estimated May 20 departure from Qingdao. MSC also said it would rework its Emerald service from Southeast Asia to drop a call to Taiwan’s Kaohsiung in favor of Xiamen, providing a direct service from that port into the largest US East Coast ports. The new rotation is expected to take effect with the May 18 departure from Singapore of the 7,000-TEU Zim Topaz. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Mediterranean Shipping Co. is reworking its trans-Pacific network starting next month to offer more reliable, direct China services into US Northeast and Southeast ports, while providing coastwide direct service from Southeast Asia. MSC said in a Thursday customer advisory that it is changing some port calls on its three main East Coast services to “enhance service reliability and schedule stability.” The new networks consolidate some China calls and will change some calls to Florida ports. MSC’s Empire Service will drop a Qingdao call, with the service now only calling Shanghai, Ningbo and Busan on the front haul. Empire’s US rotation will drop the ports of Jacksonville and Miami in favor of calls to Norfolk and Port Everglades on the backhaul. The service’s new rotation will commence with the scheduled May 27 departure of the 6,178-TEU MSC Leo VI from Shanghai. The carrier said Empire would be “less exposed to port congestion risks” due to the rotation change. Qingdao will be added to MSC’s Amberjack service into the US Southeast. However, MSC will no longer provide direct service from Yantian and Xiamen but instead focus the service on northeast Asia ports. The service will also replace a call to Norfolk with a call to Jacksonville. MSC said the Amberjack changes would improve transit times and network stability. The new rotation goes into effect with the service’s estimated May 20 departure from Qingdao. MSC also said it would rework its Emerald service from Southeast Asia to drop a call to Taiwan’s Kaohsiung in favor of Xiamen, providing a direct service from that port into the largest US East Coast ports. The new rotation is expected to take effect with the May 18 departure from Singapore of the 7,000-TEU Zim Topaz. Contact Michael Angell at michael.angell@spglobal.com .

Trans-Pacific

MSC revamps Asia-USEC network

<div class="phx-topic abstract-wrapper">The Port of Khor Fakkan “offers a relatively stable operating environment and will serve as the primary discharge hub operations,” Premier Alliance member Yang Ming said in an advisory.</div>

The Port of Khor Fakkan “offers a relatively stable operating environment and will serve as the primary discharge hub operations,” Premier Alliance member Yang Ming said in an advisory.

<div class="phx-topic">The Premier Alliance has tapped Khor Fakkan on the eastern side of the United Arab Emirates as its interim transshipment port for Middle East and Indian cargo on its Middle East-Asia-US West Coast GS2 service. The group, whose members comprise Yang Ming Marine Transport, Ocean Network Express and HMM, suspended calls at Arabian Gulf ports on the GS2 service in March following missile and drone attacks and Iran’s subsequent closure of the Strait of Hormuz. Khor Fakkan “offers a relatively stable operating environment and will serve as the primary discharge hub operations” for vessels originally scheduled to call Middle East ports, Yang Ming said in a Thursday customer advisory. “For cargo with final destinations within the Arabian Gulf region, onward transportation will be arranged via feeder vessels or alternative transshipment solutions to the respective final ports of discharge,” it added. The shift to Khor Fakkan comes as Iran’s foreign ministry Friday announced the Strait of Hormuz is now “completely open” to commercial shipping for the duration of the Iran-US ceasefire, although the situation remains murky. “We are currently verifying the recent announcement related to the reopening of the Strait of Hormuz, in terms of its compliance with freedom of navigation for all merchant vessels and secure passage using the IMO established traffic separation scheme,” International Maritime Organization secretary general Arsenio Dominguez said Friday on social media platform X. The Premier Alliance will begin calling at Khor Fakkan next week, with the first ship, the 16,000-TEU HMM Mir, due to berth Sunday and two other ships due to arrive by the end of the month, according to carrier vessel sailing schedules. The alliance has been holding cargo onboard ships for the past month while it decided what to do with Arabian Gulf cargo after attacks made ports such as Saudi Arabia’s Damman and Dubai’s Jebel Ali too risky to use. These ships are thought to include the 13,253-TEU HMM Peridot, which has been in the Indian Ocean and Arabian Sea since the end of March and is now due to call at Khor Fakkan early next week, according to vessel sailing data Friday. The 13,000-TEU HMM Garnet will be the third ship to call Khor Fakkan, with a scheduled arrival around April 26. The Premier Alliance had also curtailed some sailings to Gulf ports, opting instead to route some eastbound services to the US West Coast from Singapore. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

The Premier Alliance has tapped Khor Fakkan on the eastern side of the United Arab Emirates as its interim transshipment port for Middle East and Indian cargo on its Middle East-Asia-US West Coast GS2 service. The group, whose members comprise Yang Ming Marine Transport, Ocean Network Express and HMM, suspended calls at Arabian Gulf ports on the GS2 service in March following missile and drone attacks and Iran’s subsequent closure of the Strait of Hormuz. Khor Fakkan “offers a relatively stable operating environment and will serve as the primary discharge hub operations” for vessels originally scheduled to call Middle East ports, Yang Ming said in a Thursday customer advisory. “For cargo with final destinations within the Arabian Gulf region, onward transportation will be arranged via feeder vessels or alternative transshipment solutions to the respective final ports of discharge,” it added. The shift to Khor Fakkan comes as Iran’s foreign ministry Friday announced the Strait of Hormuz is now “completely open” to commercial shipping for the duration of the Iran-US ceasefire, although the situation remains murky. “We are currently verifying the recent announcement related to the reopening of the Strait of Hormuz, in terms of its compliance with freedom of navigation for all merchant vessels and secure passage using the IMO established traffic separation scheme,” International Maritime Organization secretary general Arsenio Dominguez said Friday on social media platform X. The Premier Alliance will begin calling at Khor Fakkan next week, with the first ship, the 16,000-TEU HMM Mir, due to berth Sunday and two other ships due to arrive by the end of the month, according to carrier vessel sailing schedules. The alliance has been holding cargo onboard ships for the past month while it decided what to do with Arabian Gulf cargo after attacks made ports such as Saudi Arabia’s Damman and Dubai’s Jebel Ali too risky to use. These ships are thought to include the 13,253-TEU HMM Peridot, which has been in the Indian Ocean and Arabian Sea since the end of March and is now due to call at Khor Fakkan early next week, according to vessel sailing data Friday. The 13,000-TEU HMM Garnet will be the third ship to call Khor Fakkan, with a scheduled arrival around April 26. The Premier Alliance had also curtailed some sailings to Gulf ports, opting instead to route some eastbound services to the US West Coast from Singapore. Contact Keith Wallis at keithwallis@hotmail.com .

International ports

Premier Alliance taps UAE’s Khor Fakkan for war-diverted cargoes

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