<div class="phx-topic abstract-wrapper">UNDERSTANDING SHIP CAPACITY PLANNINGInvariably, whenever you write about rate increa</div>

UNDERSTANDING SHIP CAPACITY PLANNINGInvariably, whenever you write about rate increa

<div>UNDERSTANDING SHIPCAPACITY PLANNINGInvariably, whenever you write about rate increases in the U.S. ocean trades, we read the same old cliches concerning carriers and overcapacity.Recently, an industry attorney wrote the following about capacity management: "The essence of common carriage is to have sufficient capacity to meet the maximum demand . . . for the service required. More often than not, that demand is greater in one direction and seasonal in nature."This is how responsible ocean carriers try to take care of their customers. Anyone involved in the trans-Pacific trade knows the eastbound routes from the Far East to the United States...

UNDERSTANDING SHIP CAPACITY PLANNING Invariably, whenever you write about rate increases in the U.S. ocean trades, we read the same old cliches concerning carriers and overcapacity. Recently, an industry attorney wrote the following about capacity management: "The essence of common carriage is to have sufficient capacity to meet the maximum demand . . . for the service required. More often than not, that demand is greater in one direction and seasonal in nature." This is how responsible ocean carriers try to take care of their customers. Anyone involved in the trans-Pacific trade knows the eastbound routes from the Far East to the United States are at maximum capacity for five months every year. Only a couple of years ago, shippers had to fight for space every summer. Carriers study the trade forecasts and try to build for the future. Ships take at least three years to build, from the planning stage to delivery. Sometimes conditions change, but the trans-Pacific route has been reasonably steady; carriers have acted responsibly and in the interests of their customers. In a responsibly operated trans-Pacific trade there is going to be overcapacity year-round in the westbound route and in the eastbound route during the non-peak season. Were it otherwise, U.S. retailers would be clamoring for space during the peak season, and rates would rise accordingly. One must be sympathetic with the plight of shippers, many of whom operate under brutally competitive circumstances. What some want is the so-called level playing field. But service contracts are now an industry standard, and the economic might of the large-volume customers works against that scenario. In retrospect, perhaps the Transpacific Westbound Rate Agreement had it right when it refused to offer service contracts, but those with the clout want their edge. Increasingly, carriers' relationship with customers is becoming adversarial and even litigious. This sometimes is fueled by misunderstanding, which is unfortunate. Anything you can do to help heal the rift would be welcomed by all involved. David A. Harper San Francisco WEST COAST'S AIR CARGO POTENTIAL I read your recent article, "Air Cargo Expects Lift from Latin Trade Plans," with particular interest (Dec. 19, Page 1A). As an airline general sales agent focusing on air freight trade, specifically between the U.S. West Coast and Latin America, I was not surprised by the information in the article. Over the last 10 years we have seen explosive growth in air cargo volumes in the West Coast region, and there is more yet to come! We have, however, been frustrated by the lack of attention given to our region, particularly by air carriers. Latin American carriers, for example, have relied solely on the natural gateway of Miami and have resisted development of other gateways, which could ease congestion and improve transit times. In at least one instance, this has forced shippers to relocate their facilities in order to move their goods more expeditiously. While the ideal situation would be to provide direct carriage from West Coast airports, markets can also be developed using road feeder service and interline carriage. Yet that alternative also is overlooked, leaving shippers with limited choices, second-rate service and, because of time differences, an inability to communicate with carriers after mid-afternoon, Pacific time. Only three carriers provide any kind of direct air freighter service from the West Coast to Latin America. It has been our goal to improve this situation by bringing more local representation to West Coast shippers. This region is a very large market, particularly since it also includes trade with the Far East. How long will it take before some airline with enough vision wakes up to the burgeoning potential in the West Coast? J. Harlan Comee, President Transnational Aviation Yorba Linda, Calif.

LETTERS TO THE EDITOR

<div class="phx-topic abstract-wrapper">Mid-size importers are generally satisfied with the base rates contained in their 2026-27 service contracts, but many are at the mercy of ocean carriers as to how emergency fuel surcharges are being handled.</div>

Mid-size importers are generally satisfied with the base rates contained in their 2026-27 service contracts, but many are at the mercy of ocean carriers as to how emergency fuel surcharges are being handled.

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<div class="phx-topic">Mid-size US retailers and direct importers of Asia-sourced goods are finalizing 2026-27 service contracts with ocean carriers at base rates roughly comparable to last year — but with hundreds of dollars of additional bunker fuel surcharges baked in amid the war-driven jump in global oil prices. Container lines, despite facing a year of flat or negative volume growth and mounting global overcapacity, have generally been able to hold the line on trans-Pacific base rates while negotiating with cargo owners over how the higher fuel prices will be billed. Mid-size importers — those moving roughly 20,000 to 100,000 TEUs annually — have secured contracts in the range of $1,650 to $1,950 per FEU to the West Coast, with East Coast business about $1,000 per FEU higher, according to multiple industry sources. Those levels are comparable to the base rates in the expiring 2025-26 service contracts. However, with crude oil trading over $100 per barrel <a href="https://www.joc.com/article/hapag-lloyd-imposes-emergency-fuel-surcharges-on-third-party-feeder-cargo-6207629">due to the war in the Middle East</a> and closure of the Strait of Hormuz, carriers are approaching customers in the final stages of their 2026-27 service contract negotiations with bunker surcharges of as much as $400 per FEU, which would push the all-in freight rates to the US West Coast above $2,000 per FEU. That’s noticeably higher than last year when bunker fuel prices were stable. Most annual service contracts begin May 1 and run through April 30 of the following year. The Journal of Commerce spoke to seven ocean carriers, five forwarders, and three industry consultants for this story. “A lot of time customers push back on the surcharges, but the market is going to dictate what they are,” one carrier executive said. “Perhaps some carriers are more rigid than others as to how they apply additional surcharges, but I think that’s a matter of discussion.” Direct importers and forwarders are objecting to what they say are unilateral decisions by some carriers to change the standard bunker adjustment factor (BAF) in service contracts from a quarterly review to a monthly reset. Customers are also challenging carriers that are charging <a href="https://www.joc.com/article/carriers-handling-of-fuel-surcharges-agitates-small-midsize-trans-pac-shippers-6208047">emergency bunker surcharges (EBSs) that do not contain a clause</a> that would shift the EBS lower as oil prices drop. A second carrier executive said that given the current uncertainties due to the war in the Middle East, customers are asking shipping lines to offer guarantees and specify timelines around the bunker surcharges that are impossible to give. “If you ask a shipping line today, ‘Can you put an expiration date on the EBS, they cannot,’” the source said. A third carrier executive noted that fuel surcharges will vary noticeably based on the size of the customer and also the business relationship each carrier has with its customers. A large customer with a history of meeting the minimum quantity commitments (MQCs) in its annual contracts may be able to limit its fuel surcharge to as little as $100 per container, whereas smaller customers who have not booked frequently with the carrier may be offered a take-it-or-leave-it EBS of $400 per container, the carrier source explained. An industry consultant who has negotiated service contracts for big-box retailers said in order to finalize their negotiations, mid-size retailers and importers should shift their focus to fuel surcharges. “The key for shippers is don’t focus on just the base rate,” the consultant said. “Also understand what the floating bunker (charge) looks like and the emergency bunker surcharge, which at some point will go away.” The source added it is a fact that carriers are getting hit hard right now by higher fuel costs, with bunker fuel prices at major hubs, especially in Asia, essentially doubling after the war began. “It has to be passed down,” the source said. “They can’t just absorb those kinds of costs.” Carriers are including BAFs and emergency bunker surcharges in their service contract negotiations not only because they are being hit with higher bunker costs, but also because they are paying railroads and truckers more due to increased costs in those sectors, said Jason Cook, CEO of the forwarder Ardent Global Logistics. “They’re definitely standing firm on fuel surcharges,” Cook said of ocean carriers. “All costs are going up.” <h3>Contract extensions not a big issue </h3>In mid-April, two weeks before the May 1 start date of 2026-27 contracts, BCOs expressed concern that, facing a backlog of unsigned contracts, carriers would not be able to finalize all of the outstanding deals on time. Customers feared they would have no choice but to pay much higher spot rates until their new contracts were finalized. Spot rates from Asia to the US West Coast as of Wednesday were $2,767 per FEU to the West Coast and $3,767 to the East Coast, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Drewry pegged spot rates as of April 23 at $2,934 per FEU to the West Coast and $3,562 per FEU to the East Coast. In the case of both indexes, West Coast spot/freight-all-kinds rates have been above $2,000 per FEU for all of April. In their expiring 2025-26 service contracts, mid-size BCOs are paying in the range of $1,700 to $1,850 per FEU to the West Coast, so shipping under spot rates would add hundreds of dollars per container to the all-in rate. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="7f641553-97ec-4014-8e54-fef6408538d9"></dynamic-object></div>But most carriers this week are agreeing to give their customers an extension of their 2025-26 service contracts until mid- to late-May while new deals are finalized, sources say, thus sparing customers from the more expensive spot market. “They’re extending the contracts now,” Jon Monroe, who serves as an adviser to forwarders, said of ocean carriers. Bob Fredman, an industry consultant who for many years managed logistics for national retailers, said he encountered similar situations in years when there was a backlog of contracts waiting to be processed. The delays were often needed to wrap up the language in new contracts that went down to the wire. “I don’t think it’s something that’s going to be a deal-breaker for anyone,” Fredman said. <h3>Carriers limiting fixed-account bookings for NVOs </h3>As is customary, carriers have waited until the final week or so before the May 1 deadline to finalize contracts with most of the non-vessel-operating common carriers (NVOs) that book with them. That is once again the case this year, forwarders say. Some carriers are being especially restrictive as to how many containers their NVO customers can ship under their named account (NAC) rates, several forwarders said. NAC rates are fixed for the duration of the contract. Many carriers right now are requiring that NVOs book as many as four containers under higher FAK rates for each fixed-account booking. Named account rates are likely to settle in below $2,000 per FEU to the West Coast, so that means forwarders will be shipping about 80% of their containers under the higher FAK rates, the forwarders said. However, requiring that ratio is not a new strategy, especially when FAK rates are noticeably higher than the fixed rates at the time the contracts are being signed, one forwarder said. “We don’t see this as being any more prevalent than in the past,” said the source. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.Mark Szakonyi contributed to this report.</div>

Mid-size US retailers and direct importers of Asia-sourced goods are finalizing 2026-27 service contracts with ocean carriers at base rates roughly comparable to last year — but with hundreds of dollars of additional bunker fuel surcharges baked in amid the war-driven jump in global oil prices. Container lines, despite facing a year of flat or negative volume growth and mounting global overcapacity, have generally been able to hold the line on trans-Pacific base rates while negotiating with cargo owners over how the higher fuel prices will be billed. Mid-size importers — those moving roughly 20,000 to 100,000 TEUs annually — have secured contracts in the range of $1,650 to $1,950 per FEU to the West Coast, with East Coast business about $1,000 per FEU higher, according to multiple industry sources. Those levels are comparable to the base rates in the expiring 2025-26 service contracts. However, with crude oil trading over $100 per barrel due to the war in the Middle East and closure of the Strait of Hormuz, carriers are approaching customers in the final stages of their 2026-27 service contract negotiations with bunker surcharges of as much as $400 per FEU, which would push the all-in freight rates to the US West Coast above $2,000 per FEU. That’s noticeably higher than last year when bunker fuel prices were stable. Most annual service contracts begin May 1 and run through April 30 of the following year. The Journal of Commerce spoke to seven ocean carriers, five forwarders, and three industry consultants for this story. “A lot of time customers push back on the surcharges, but the market is going to dictate what they are,” one carrier executive said. “Perhaps some carriers are more rigid than others as to how they apply additional surcharges, but I think that’s a matter of discussion.” Direct importers and forwarders are objecting to what they say are unilateral decisions by some carriers to change the standard bunker adjustment factor (BAF) in service contracts from a quarterly review to a monthly reset. Customers are also challenging carriers that are charging emergency bunker surcharges (EBSs) that do not contain a clause that would shift the EBS lower as oil prices drop. A second carrier executive said that given the current uncertainties due to the war in the Middle East, customers are asking shipping lines to offer guarantees and specify timelines around the bunker surcharges that are impossible to give. “If you ask a shipping line today, ‘Can you put an expiration date on the EBS, they cannot,’” the source said. A third carrier executive noted that fuel surcharges will vary noticeably based on the size of the customer and also the business relationship each carrier has with its customers. A large customer with a history of meeting the minimum quantity commitments (MQCs) in its annual contracts may be able to limit its fuel surcharge to as little as $100 per container, whereas smaller customers who have not booked frequently with the carrier may be offered a take-it-or-leave-it EBS of $400 per container, the carrier source explained. An industry consultant who has negotiated service contracts for big-box retailers said in order to finalize their negotiations, mid-size retailers and importers should shift their focus to fuel surcharges. “The key for shippers is don’t focus on just the base rate,” the consultant said. “Also understand what the floating bunker (charge) looks like and the emergency bunker surcharge, which at some point will go away.” The source added it is a fact that carriers are getting hit hard right now by higher fuel costs, with bunker fuel prices at major hubs, especially in Asia, essentially doubling after the war began. “It has to be passed down,” the source said. “They can’t just absorb those kinds of costs.” Carriers are including BAFs and emergency bunker surcharges in their service contract negotiations not only because they are being hit with higher bunker costs, but also because they are paying railroads and truckers more due to increased costs in those sectors, said Jason Cook, CEO of the forwarder Ardent Global Logistics. “They’re definitely standing firm on fuel surcharges,” Cook said of ocean carriers. “All costs are going up.” Contract extensions not a big issue In mid-April, two weeks before the May 1 start date of 2026-27 contracts, BCOs expressed concern that, facing a backlog of unsigned contracts, carriers would not be able to finalize all of the outstanding deals on time. Customers feared they would have no choice but to pay much higher spot rates until their new contracts were finalized. Spot rates from Asia to the US West Coast as of Wednesday were $2,767 per FEU to the West Coast and $3,767 to the East Coast, according to Platts, a sister company of the Journal of Commerce within S&P Global. Drewry pegged spot rates as of April 23 at $2,934 per FEU to the West Coast and $3,562 per FEU to the East Coast. In the case of both indexes, West Coast spot/freight-all-kinds rates have been above $2,000 per FEU for all of April. In their expiring 2025-26 service contracts, mid-size BCOs are paying in the range of $1,700 to $1,850 per FEU to the West Coast, so shipping under spot rates would add hundreds of dollars per container to the all-in rate. But most carriers this week are agreeing to give their customers an extension of their 2025-26 service contracts until mid- to late-May while new deals are finalized, sources say, thus sparing customers from the more expensive spot market. “They’re extending the contracts now,” Jon Monroe, who serves as an adviser to forwarders, said of ocean carriers. Bob Fredman, an industry consultant who for many years managed logistics for national retailers, said he encountered similar situations in years when there was a backlog of contracts waiting to be processed. The delays were often needed to wrap up the language in new contracts that went down to the wire. “I don’t think it’s something that’s going to be a deal-breaker for anyone,” Fredman said. Carriers limiting fixed-account bookings for NVOs As is customary, carriers have waited until the final week or so before the May 1 deadline to finalize contracts with most of the non-vessel-operating common carriers (NVOs) that book with them. That is once again the case this year, forwarders say. Some carriers are being especially restrictive as to how many containers their NVO customers can ship under their named account (NAC) rates, several forwarders said. NAC rates are fixed for the duration of the contract. Many carriers right now are requiring that NVOs book as many as four containers under higher FAK rates for each fixed-account booking. Named account rates are likely to settle in below $2,000 per FEU to the West Coast, so that means forwarders will be shipping about 80% of their containers under the higher FAK rates, the forwarders said. However, requiring that ratio is not a new strategy, especially when FAK rates are noticeably higher than the fixed rates at the time the contracts are being signed, one forwarder said. “We don’t see this as being any more prevalent than in the past,” said the source. Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com . Mark Szakonyi contributed to this report.

Container lines

Forwarding

Trans-Pacific

Container Shipping News

Maritime

Fuel charges complicate rush to ink new trans-Pacific service contracts

<div class="phx-topic abstract-wrapper">The terminal, jointly owned by Ports America and MSC’s Terminal Investment Limited, unveiled new container handling equipment as part of a growth drive to increase capacity by 40%.</div>

The terminal, jointly owned by Ports America and MSC’s Terminal Investment Limited, unveiled new container handling equipment as part of a growth drive to increase capacity by 40%.

<div class="phx-topic">Newark — The Port of New York and New Jersey’s third-busiest marine terminal on Wednesday unveiled $100 million in new container handling equipment and related facilities, the first step in a $1 billion plan to add a new berth and more rail capacity for its main customer, Mediterranean Shipping Co. Port Newark Container Terminal (PNCT) held a ribbon-cutting ceremony at a new maintenance shop designed for the terminal’s new, larger straddle carriers, which can span four-high container stacks. Along with the new shop, PNCT took delivery of the first 15 of the straddle carriers, with another 20 set for delivery by early 2027. The new yard equipment and shop are the first phase of PNCT’s plan to increase container volumes by 40% over the next three years, its Chief Executive Jim Pellicio told the Journal of Commerce. PNCT, jointly owned by Ports America and MSC’s Terminal Investment Limited (TiL), eventually plans to replace its entire fleet with 150 of the new straddle carriers, effectively increasing yard capacity by nearly a third through higher stacks. The new fleet will also be entirely diesel-electric hybrid as PNCT switches an increasing amount of its energy use to renewables. Over the past decade, PNCT has installed a solar array over its truck lanes and parking lot that takes up the equivalent of 12 acres of land, Pellicio said, generating half of the terminal’s energy. “This $100 million is a down payment on where PNCT has to go next,” Pellicio said. “The maintenance facility is built to support a much larger terminal than what we have today.” PNCT’s last upgrade cycle started in 2014, with a <a href="https://www.joc.com/article/upgrade-boosts-nynjs-pnct-terminal-capacity-5224445">$600 million investment</a> that included adding about 17 acres of terminal space, strengthening its three berths for larger ships, and <a href="https://www.joc.com/article/new-cranes-put-ny-nj-port-on-track-to-handle-more-ultra-large-ships-by-2025-5226275">adding two ultra-large ship cranes</a>. By 2020, that project had increased PNCT’s nominal capacity to about 2 million TEUs, up from 1.4 million TEUs. The next investment cycle will bring PNCT’s capacity to about 2.8 million TEUs, Pellicio said, adding that the terminal could add another 150 longshore jobs by 2029 due to the expansion. A big part of that upgrade will be an additional 68 acres on the terminal’s eastern end. The new space will come from <a href="https://www.joc.com/article/newark-port-project-to-give-mscs-terminal-more-room-to-grow-5703152">the Port Authority of New York and New Jersey’s $198 million rehabilitation</a> of a general cargo berth on the Newark peninsula’s southeastern end, along with the relocation of other port tenant properties to make way for container operations. The rehabilitation of Newark’s southeastern portion will provide PNCT another 400 feet of berth space on its eastern end by 2028. PNCT is also renovating another 700 feet of berth space on its western end, which will turn it into a four-berth facility. Pellicio said the additional space would allow PNCT to handle two 18,000-TEU ships simultaneously, along with a 9,000-TEU ship. Currently, its three berths can handle two 9,000-TEU ships and one 18,000-TEU ship. Although ships of that size will also require further dredging of the NY-NJ port to a 55-foot depth, Pellicio said it’s important to have PNCT ready for that next step. “There are no ships that need a 55-foot depth today, but you better build it today because they won’t come otherwise,” he said. <h3>Will add on-dock rail yard </h3>Along with the new equipment and berth, PNCT plans to add an on-dock rail yard at its eastern end, which should allow containers to move more easily to railcars. PNCT currently relies on yard hostlers to ferry containers over a flyover bridge to its rail yard adjacent to the New Jersey Turnpike. PNCT already leads the port in terms of inland cargo moves, with about 24% of its containers moving out on rail compared with a port-wide average of about 15%. Pellicio said the terminal needs more intermodal capacity because “MSC has a significant amount of rail containers.” “The shipping company might say ‘just take my New York boxes and leave the rail boxes for Savannah or Baltimore,’” Pellicio said. “I’m saying to them with this investment, take all the boxes off at PNCT. We will have the berths to do it and the rail to do it.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Newark — The Port of New York and New Jersey’s third-busiest marine terminal on Wednesday unveiled $100 million in new container handling equipment and related facilities, the first step in a $1 billion plan to add a new berth and more rail capacity for its main customer, Mediterranean Shipping Co. Port Newark Container Terminal (PNCT) held a ribbon-cutting ceremony at a new maintenance shop designed for the terminal’s new, larger straddle carriers, which can span four-high container stacks. Along with the new shop, PNCT took delivery of the first 15 of the straddle carriers, with another 20 set for delivery by early 2027. The new yard equipment and shop are the first phase of PNCT’s plan to increase container volumes by 40% over the next three years, its Chief Executive Jim Pellicio told the Journal of Commerce. PNCT, jointly owned by Ports America and MSC’s Terminal Investment Limited (TiL), eventually plans to replace its entire fleet with 150 of the new straddle carriers, effectively increasing yard capacity by nearly a third through higher stacks. The new fleet will also be entirely diesel-electric hybrid as PNCT switches an increasing amount of its energy use to renewables. Over the past decade, PNCT has installed a solar array over its truck lanes and parking lot that takes up the equivalent of 12 acres of land, Pellicio said, generating half of the terminal’s energy. “This $100 million is a down payment on where PNCT has to go next,” Pellicio said. “The maintenance facility is built to support a much larger terminal than what we have today.” PNCT’s last upgrade cycle started in 2014, with a $600 million investment that included adding about 17 acres of terminal space, strengthening its three berths for larger ships, and adding two ultra-large ship cranes . By 2020, that project had increased PNCT’s nominal capacity to about 2 million TEUs, up from 1.4 million TEUs. The next investment cycle will bring PNCT’s capacity to about 2.8 million TEUs, Pellicio said, adding that the terminal could add another 150 longshore jobs by 2029 due to the expansion. A big part of that upgrade will be an additional 68 acres on the terminal’s eastern end. The new space will come from the Port Authority of New York and New Jersey’s $198 million rehabilitation of a general cargo berth on the Newark peninsula’s southeastern end, along with the relocation of other port tenant properties to make way for container operations. The rehabilitation of Newark’s southeastern portion will provide PNCT another 400 feet of berth space on its eastern end by 2028. PNCT is also renovating another 700 feet of berth space on its western end, which will turn it into a four-berth facility. Pellicio said the additional space would allow PNCT to handle two 18,000-TEU ships simultaneously, along with a 9,000-TEU ship. Currently, its three berths can handle two 9,000-TEU ships and one 18,000-TEU ship. Although ships of that size will also require further dredging of the NY-NJ port to a 55-foot depth, Pellicio said it’s important to have PNCT ready for that next step. “There are no ships that need a 55-foot depth today, but you better build it today because they won’t come otherwise,” he said. Will add on-dock rail yard Along with the new equipment and berth, PNCT plans to add an on-dock rail yard at its eastern end, which should allow containers to move more easily to railcars. PNCT currently relies on yard hostlers to ferry containers over a flyover bridge to its rail yard adjacent to the New Jersey Turnpike. PNCT already leads the port in terms of inland cargo moves, with about 24% of its containers moving out on rail compared with a port-wide average of about 15%. Pellicio said the terminal needs more intermodal capacity because “MSC has a significant amount of rail containers.” “The shipping company might say ‘just take my New York boxes and leave the rail boxes for Savannah or Baltimore,’” Pellicio said. “I’m saying to them with this investment, take all the boxes off at PNCT. We will have the berths to do it and the rail to do it.” Contact Michael Angell at michael.angell@spglobal.com .

Port News

Port infrastructure

North American ports

Marine terminals

NY-NJ’s Port Newark terminal takes first steps in next big expansion

<div class="phx-topic abstract-wrapper">The company is one of several LTL carriers reporting growing volumes, although its daily shipments are still down year over year.</div>

The company is one of several LTL carriers reporting growing volumes, although its daily shipments are still down year over year.

<div class="phx-topic">After three years of depressed demand, freight is returning to US less-than-truckload (LTL) networks, with daily volumes climbing month to month from January through April at several large LTL carriers. Those trucking companies haven’t entirely escaped the freight trough, but they’re getting closer to its edge as demand continues to accelerate. “While our first quarter revenue declined on a year-over-year basis, demand for our service improved as the quarter progressed,” Kevin “Marty” Freeman, president and CEO of Old Dominion Freight Line, said Wednesday during a first-quarter earnings call. Stronger demand contributed to sequential tonnage growth in February and March at the second-largest US LTL provider, Freeman said. ODFL’s daily volume dropped 7.9% year over year in the first quarter to 41,037 shipments per day, while tonnage per day fell 7.7%. But tonnage increased month by month, CFO Adam Satterfield told Wall Street analysts during the call. In January, tonnage dropped 3.4% from December, but it rose 4.9% in February from January, he said. The trend continued in March, when tonnage climbed 4.6% from February, said Satterfield. “Our volumes are still down on a year-over-year basis,” he said, but he expects that to flip as sequential month-to-month increases continue. The freight market “definitely feels like it’s continued to improve” in the early second quarter, Satterfield said. <h3>Truckload reversal </h3>Some of the general increase in tonnage and shipments may be attributable to freight shift rather than fresh demand, with truckload freight being redirected to LTL trailers. As truckload rates hit lows over the past few years, some shippers consolidated LTL freight and shifted it to truckload carriers to take advantage of lower pricing. “That trend has reversed,” Satterfield said. Freight optimization tools are making it easier for shippers and third-party logistics providers (3PLs) to shift freight among modes, he said. <a href="https://www.joc.com/article/soaring-truck-rates-power-major-rebound-in-domestic-intermodal-volume-6208736">Intermodal rail providers</a> are benefiting from freight shifts as well. To date in 2026, much of the improvement in volume at ODFL has come from retail customers, not traditional industrial shippers, Satterfield said. “Most of our positive performance over the past five months has been in that retail side of our business,” he said, which does not represent the majority of their freight. “We’re starting to see some early indications of industrial starting to turn the corner as well,” Satterfield said, with the Institute for Supply Management (ISM) Purchasing Managers’ Index (PMI) in expansion territory for three consecutive months as of March. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="16105334-c54a-4d51-9403-6d5bac8369c4"></dynamic-object></div>As the ISM PMI rises, “We expect to see the weight per shipment continuing to tack higher,” he said. “Right now, we’re at about 1,490 pounds per shipment. In really strong markets, we’ve been more like 1,600 pounds per shipment.” In terms of daily shipment count, “we need to get our numbers back to neutral year over year, and start getting back to what we do best, which is growth,” he said. <h3>‘Constructive’ conditions </h3>The improvement ODFL sees in the market is visible in other LTL carrier earnings. TFI International, the parent of national US LTL carrier TForce Freight, saw LTL daily volume drop 10% year over year in January and then go flat in February before rising 8% year over year in March, company executives said during a first-quarter earnings call this week. “We saw notable improvement during the quarter as weather improved, with shipments per day in March considerably stronger than January and February, and this trend continued into April,” TFI CEO Alain Bédard told analysts. “We’re starting to see a little bit of light at the end of the tunnel in terms of the demand.” Transportation and logistics provider ArcBest on Tuesday said daily shipment counts at LTL provider ABF Freight System rose 1.8% in the first quarter from a year ago. Tonnage per day rose 6.5% year over year in the quarter, indicating ABF is capturing heavier freight. “While the timing and pace of a broader recovery remains difficult to predict, conditions are becoming more constructive,” said Seth K. Runser, who succeeded Judy McReynolds as CEO of ArcBest in January. “Leading indicators of manufacturing activity have moved into expansion, which is supportive of future freight demand,” Runser told analysts on the company’s earnings call. Privately owned regional carrier Pitt Ohio sees <a href="https://www.joc.com/article/freight-returning-to-us-ltl-market-as-pricing-fuel-costs-climb-higher-6207125">daily shipment counts rising</a> as well. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

After three years of depressed demand, freight is returning to US less-than-truckload (LTL) networks, with daily volumes climbing month to month from January through April at several large LTL carriers. Those trucking companies haven’t entirely escaped the freight trough, but they’re getting closer to its edge as demand continues to accelerate. “While our first quarter revenue declined on a year-over-year basis, demand for our service improved as the quarter progressed,” Kevin “Marty” Freeman, president and CEO of Old Dominion Freight Line, said Wednesday during a first-quarter earnings call. Stronger demand contributed to sequential tonnage growth in February and March at the second-largest US LTL provider, Freeman said. ODFL’s daily volume dropped 7.9% year over year in the first quarter to 41,037 shipments per day, while tonnage per day fell 7.7%. But tonnage increased month by month, CFO Adam Satterfield told Wall Street analysts during the call. In January, tonnage dropped 3.4% from December, but it rose 4.9% in February from January, he said. The trend continued in March, when tonnage climbed 4.6% from February, said Satterfield. “Our volumes are still down on a year-over-year basis,” he said, but he expects that to flip as sequential month-to-month increases continue. The freight market “definitely feels like it’s continued to improve” in the early second quarter, Satterfield said. Truckload reversal Some of the general increase in tonnage and shipments may be attributable to freight shift rather than fresh demand, with truckload freight being redirected to LTL trailers. As truckload rates hit lows over the past few years, some shippers consolidated LTL freight and shifted it to truckload carriers to take advantage of lower pricing. “That trend has reversed,” Satterfield said. Freight optimization tools are making it easier for shippers and third-party logistics providers (3PLs) to shift freight among modes, he said. Intermodal rail providers are benefiting from freight shifts as well. To date in 2026, much of the improvement in volume at ODFL has come from retail customers, not traditional industrial shippers, Satterfield said. “Most of our positive performance over the past five months has been in that retail side of our business,” he said, which does not represent the majority of their freight. “We’re starting to see some early indications of industrial starting to turn the corner as well,” Satterfield said, with the Institute for Supply Management (ISM) Purchasing Managers’ Index (PMI) in expansion territory for three consecutive months as of March. As the ISM PMI rises, “We expect to see the weight per shipment continuing to tack higher,” he said. “Right now, we’re at about 1,490 pounds per shipment. In really strong markets, we’ve been more like 1,600 pounds per shipment.” In terms of daily shipment count, “we need to get our numbers back to neutral year over year, and start getting back to what we do best, which is growth,” he said. ‘Constructive’ conditions The improvement ODFL sees in the market is visible in other LTL carrier earnings. TFI International, the parent of national US LTL carrier TForce Freight, saw LTL daily volume drop 10% year over year in January and then go flat in February before rising 8% year over year in March, company executives said during a first-quarter earnings call this week. “We saw notable improvement during the quarter as weather improved, with shipments per day in March considerably stronger than January and February, and this trend continued into April,” TFI CEO Alain Bédard told analysts. “We’re starting to see a little bit of light at the end of the tunnel in terms of the demand.” Transportation and logistics provider ArcBest on Tuesday said daily shipment counts at LTL provider ABF Freight System rose 1.8% in the first quarter from a year ago. Tonnage per day rose 6.5% year over year in the quarter, indicating ABF is capturing heavier freight. “While the timing and pace of a broader recovery remains difficult to predict, conditions are becoming more constructive,” said Seth K. Runser, who succeeded Judy McReynolds as CEO of ArcBest in January. “Leading indicators of manufacturing activity have moved into expansion, which is supportive of future freight demand,” Runser told analysts on the company’s earnings call. Privately owned regional carrier Pitt Ohio sees daily shipment counts rising as well. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

Surface

ODFL sees signs of growing LTL demand in sequential volume gain

<div class="phx-topic abstract-wrapper">DSV CEO Jens Lund, speaking during the company’s first-quarter earnings call Wednesday, said the integration of Schenker has been completed in more than 50 countries, with full integration still on tap by the end of this year.</div>

DSV CEO Jens Lund, speaking during the company’s first-quarter earnings call Wednesday, said the integration of Schenker has been completed in more than 50 countries, with full integration still on tap by the end of this year.

<div class="phx-topic">Some 7,000 full-time employees have been laid off amid the ongoing integration of DB Schenker into forwarding giant DSV, with another 1,000 expected to lose their jobs in the second quarter, DSV CEO Jens Lund said Wednesday. Lund, speaking during DSV’s first-quarter earnings call, said integration of the two companies has been completed in more than 50 countries. Full integration should be completed by the end of this year, he reiterated. Integration will create $1.5 billion in synergies next year, while integration costs are still estimated at $1.7 billion, Lund said. DSV CFO Michael Ebbe, meanwhile, said further acquisitions are likely in the future, but he ruled out any immediate deals while the company continued to digest the Schenker acquisition. “Consolidation is here to stay, and I’m confident we’ll be part of that going forward,” Ebbe told the Journal of Commerce in an interview Wednesday ahead of the results briefing. Ebbe said while DSV is “not looking at anything else,” expansion could come from the acquisition of a large regional player or a large forwarder specializing in specific logistics markets. <h3>Q1 net profit down sharply </h3>DSV’s net profit dropped 42% to $256 million in the first quarter, while revenue climbed 69% to $11 billion. The company didn’t say explicitly why profit fell, but it took a very big hit on costs — direct costs were up to $8 billion from $4.6 billion, staff costs increased to $1.4 billion from $688 million, and other external costs doubled to $382 million. DSV’s air and ocean segment posted a 20% year-over-year increase in gross profit to $1.2 billion, while revenue surged 43% to $5.7 billion. Highlighting the Schenker effect, DSV saw airfreight volumes surge 55% to 518,000 metric tons in the first quarter, while ocean freight volumes increased 50% to 976,000 metric tons. Lund said sea freight volumes last year were buoyed by the frontloading of cargo ahead of the introduction of US tariffs last April. Overall, DSV expected the global air and sea freight markets to grow between 2% and 3% this year, in line or slightly below global GDP forecasts. The Schenker merger also drove a 128% rise in revenue at road logistics to $3.6 billion and a 107% increase in contract logistics revenue to $2 billion. DSV did not give tonnage figures for either division. Meanwhile, inflation and elevated interest rates are dampening the demand outlook for the global logistics sector, while tariff policies and geopolitical uncertainty are also providing headwinds, Lund said. “It’s a volatile environment we’re looking at,” he said. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Some 7,000 full-time employees have been laid off amid the ongoing integration of DB Schenker into forwarding giant DSV, with another 1,000 expected to lose their jobs in the second quarter, DSV CEO Jens Lund said Wednesday. Lund, speaking during DSV’s first-quarter earnings call, said integration of the two companies has been completed in more than 50 countries. Full integration should be completed by the end of this year, he reiterated. Integration will create $1.5 billion in synergies next year, while integration costs are still estimated at $1.7 billion, Lund said. DSV CFO Michael Ebbe, meanwhile, said further acquisitions are likely in the future, but he ruled out any immediate deals while the company continued to digest the Schenker acquisition. “Consolidation is here to stay, and I’m confident we’ll be part of that going forward,” Ebbe told the Journal of Commerce in an interview Wednesday ahead of the results briefing. Ebbe said while DSV is “not looking at anything else,” expansion could come from the acquisition of a large regional player or a large forwarder specializing in specific logistics markets. Q1 net profit down sharply DSV’s net profit dropped 42% to $256 million in the first quarter, while revenue climbed 69% to $11 billion. The company didn’t say explicitly why profit fell, but it took a very big hit on costs — direct costs were up to $8 billion from $4.6 billion, staff costs increased to $1.4 billion from $688 million, and other external costs doubled to $382 million. DSV’s air and ocean segment posted a 20% year-over-year increase in gross profit to $1.2 billion, while revenue surged 43% to $5.7 billion. Highlighting the Schenker effect, DSV saw airfreight volumes surge 55% to 518,000 metric tons in the first quarter, while ocean freight volumes increased 50% to 976,000 metric tons. Lund said sea freight volumes last year were buoyed by the frontloading of cargo ahead of the introduction of US tariffs last April. Overall, DSV expected the global air and sea freight markets to grow between 2% and 3% this year, in line or slightly below global GDP forecasts. The Schenker merger also drove a 128% rise in revenue at road logistics to $3.6 billion and a 107% increase in contract logistics revenue to $2 billion. DSV did not give tonnage figures for either division. Meanwhile, inflation and elevated interest rates are dampening the demand outlook for the global logistics sector, while tariff policies and geopolitical uncertainty are also providing headwinds, Lund said. “It’s a volatile environment we’re looking at,” he said. Contact Keith Wallis at keithwallis@hotmail.com .

Air Cargo

Supply chain

More job cuts in the works for Q2 as DSV-Schenker integration continues: Lund

<div class="phx-topic abstract-wrapper">Highlighting the carrier’s Asia focus and volume growth potential, PIL said it will take delivery of at least two 13,064-TEU container ships this year that could be deployed on long-haul Asia-South America and Asia-Middle East services.</div>

Highlighting the carrier’s Asia focus and volume growth potential, PIL said it will take delivery of at least two 13,064-TEU container ships this year that could be deployed on long-haul Asia-South America and Asia-Middle East services.

<div class="phx-topic">Singapore’s Pacific International Lines (PIL) says it’s set to see further growth in container volumes from new vessel deliveries and service launches this year despite difficult market conditions. “While the year ahead remains challenging amid geopolitical tensions, supply chain disruption and new capacity entering the market, Asia continues to be a key engine of global trade growth,” PIL CEO Lars Kastrup said in an earnings statement Wednesday. Highlighting the carrier’s Asia focus and volume growth potential, PIL said it will take delivery of at least two 13,064-TEU container ships this year, part of an order for five 13,000-TEU ships placed in 2024. The ships, which could be deployed on long-haul Asia-South America and Asia-Middle East services, are part of a fleet expansion that will add 20 vessels totaling 232,000 TEUs in the next three years that will increase PIL’s fleet capacity to more than 700,000 TEUs. The carrier, ranked 12th-largest globally by capacity, according to Alphaliner, will also expand its network next month with the planned launch from May 28 of an Asia-southern Africa express service in association with Taiwan’s Evergreen Marine. The carriers will deploy a total of nine ships varying in size between 4,800 and 5,600 TEUs on what PIL calls its Ubuntu Express (UBX) service. “The Ubuntu Express is introduced in response to growing trade demand between Asia and South Africa, driven by rising consumer markets, expanding industrial activity, and increasing flows of agricultural, temperature‑sensitive and manufactured goods,” PIL said in a separate service announcement this week. The move also increases the number of PIL’s Asia-Africa services to seven. The full rotation of the new service is Shanghai, Ningbo, Kaohsiung, Shekou, Singapore, Durban, Cape Town, Singapore, Shanghai. <h3>Volumes climbed 17% last year </h3>PIL, meanwhile, said its container volumes last year climbed 17% to 2.6 million TEUs after it strengthened its network in 14 countries, including new intra-Asia and South America services, while adding six ships to its fleet ranging in size from 8,000 to 13,000 TEUs. Overall, group revenue slipped 1% to $4.3 billion last year while net profit fell 23% to $1 billion. PIL’s container shipping division saw earnings before interest, taxes, depreciation and amortization ease to $1.5 billion last year from almost $1.7 billion the prior year, while revenue was flat at about $3.8 billion. “While cost pressures and freight rate moderation weighed on margins compared with the rate levels recorded in 2024, the business continued to generate healthy earnings,” the carrier said. PIL does not report quarterly earnings. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>.</div>

Singapore’s Pacific International Lines (PIL) says it’s set to see further growth in container volumes from new vessel deliveries and service launches this year despite difficult market conditions. “While the year ahead remains challenging amid geopolitical tensions, supply chain disruption and new capacity entering the market, Asia continues to be a key engine of global trade growth,” PIL CEO Lars Kastrup said in an earnings statement Wednesday. Highlighting the carrier’s Asia focus and volume growth potential, PIL said it will take delivery of at least two 13,064-TEU container ships this year, part of an order for five 13,000-TEU ships placed in 2024. The ships, which could be deployed on long-haul Asia-South America and Asia-Middle East services, are part of a fleet expansion that will add 20 vessels totaling 232,000 TEUs in the next three years that will increase PIL’s fleet capacity to more than 700,000 TEUs. The carrier, ranked 12th-largest globally by capacity, according to Alphaliner, will also expand its network next month with the planned launch from May 28 of an Asia-southern Africa express service in association with Taiwan’s Evergreen Marine. The carriers will deploy a total of nine ships varying in size between 4,800 and 5,600 TEUs on what PIL calls its Ubuntu Express (UBX) service. “The Ubuntu Express is introduced in response to growing trade demand between Asia and South Africa, driven by rising consumer markets, expanding industrial activity, and increasing flows of agricultural, temperature‑sensitive and manufactured goods,” PIL said in a separate service announcement this week. The move also increases the number of PIL’s Asia-Africa services to seven. The full rotation of the new service is Shanghai, Ningbo, Kaohsiung, Shekou, Singapore, Durban, Cape Town, Singapore, Shanghai. Volumes climbed 17% last year PIL, meanwhile, said its container volumes last year climbed 17% to 2.6 million TEUs after it strengthened its network in 14 countries, including new intra-Asia and South America services, while adding six ships to its fleet ranging in size from 8,000 to 13,000 TEUs. Overall, group revenue slipped 1% to $4.3 billion last year while net profit fell 23% to $1 billion. PIL’s container shipping division saw earnings before interest, taxes, depreciation and amortization ease to $1.5 billion last year from almost $1.7 billion the prior year, while revenue was flat at about $3.8 billion. “While cost pressures and freight rate moderation weighed on margins compared with the rate levels recorded in 2024, the business continued to generate healthy earnings,” the carrier said. PIL does not report quarterly earnings. Contact Keith Wallis at keithwallis@hotmail.com .

Singapore’s PIL bets on volume growth from vessel deliveries, new services

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