<div class="phx-topic abstract-wrapper"><p>A.P. Moller-Maersk’s integration strategy calls for the carrier to grow its non-ocean segment to half the business, but that process slowed dramatically in 2019.</p></div>

A.P. Moller-Maersk’s integration strategy calls for the carrier to grow its non-ocean segment to half the business, but that process slowed dramatically in 2019.

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<div><p>A.P. Møller - Maersk is more than halfway through its transformation process, according to CEO Søren Skou, but 2019 financial results show the carrier managed to grow its non-ocean revenue, a key success metric of its integration strategy, by just 0.1 percent.</p><p>Non-ocean revenue actually decreased 2.9 percent last year before being adjusted for the closure of the production capacity of equipment manufacturing subsidiary Maersk Container Industry. That was a steep slowdown for the non-ocean segment, which grew 6.3 percent year over year in 2018 and 5.6 percent in 2017.</p><p>Among the stated goals of transforming Maersk from an ocean transport company...

A.P. Møller - Maersk is more than halfway through its transformation process, according to CEO Søren Skou, but 2019 financial results show the carrier managed to grow its non-ocean revenue, a key success metric of its integration strategy, by just 0.1 percent. Non-ocean revenue actually decreased 2.9 percent last year before being adjusted for the closure of the production capacity of equipment manufacturing subsidiary Maersk Container Industry. That was a steep slowdown for the non-ocean segment, which grew 6.3 percent year over year in 2018 and 5.6 percent in 2017. Among the stated goals of transforming Maersk from an ocean transport company to an end-to-end provider of global container logistics is to grow its share of non-ocean services to account for half its total business, up from 25 percent today. No timeline was given, but Skou said the company is “more than halfway into the transformation of Maersk from a conglomerate in many different industries and divisions to one company in container logistics.” “We are now one company with one front line,” he told JOC.com in an interview after Thursday’s 2019 earnings announcement. “The focus is to grow our landside business and digital transformation. We still have lots to do.” A $61 million fourth-quarter loss pulled A.P. Møller - Maersk’s net profit down to $509 million for the full year compared with a loss of $755 million in 2018. Revenue of $38.89 billion was down 0.9 percent from 2018. Revenue from its Ocean business, the group’s largest segment, was flat at $28.4 billion, as was full-year container volume of 13.29 million TEU. The stock market did not appear to be enamored by the Maersk results. Fears of the impact of the coronavirus (COVID-19) on 2020 earnings saw the carrier’s share price on the Nasdaq Nordic Exchange fall 3.44 percent Thursday. Maersk’s share price is down 10.29 percent year over year. In its guidance for the year, Maersk said the coronavirus has “significantly lowered visibility” on what to expect in 2020, and a recovery would not be seen until late in the second quarter. Multi-phase transformation Maersk began its transformation from container shipping company to integrated provider of container logistics in the fall of 2016, with the first phase focusing on ocean delivery with the commercial team to improve integrated services for the carrier’s 70,000 customers. Maersk has now moved into the second phase of its integration , having spent the last couple of years separating its energy business, digesting the acquisition of Hamburg Sud, and investing in technology to build its digital solutions. Over the next three to five years, Maersk will continue to acquire a host of smaller logistics providers and technology platforms in multiple geographies with the ultimate goal of being able to offer a standardized suite of end-to-end logistics solutions on a global scale, Vincent Clerc, who was recently named CEO of Maersk Logistics & Services to lead the transformation effort, told JOC.com in December. As part of that plan, Maersk this week acquired the North American warehousing and distribution company Performance Team for $545 million, expanding its landside logistics footprint in the region. In early December, the carrier announced a flurry of acquisition activity in the technology sector, including investments in a Copenhagen-based telecommunications startup through the Maersk Growth venture capital arm; in a flagship customer, the Swiss agribusiness Syngenta, for its fourth-party logistics (4PL) business; in a new container visibility smartphone app, called Captain Peter ; and in a new cohort of startups participating in its India technology accelerator program, OceanPro. According to Maersk’s annual report, the company derived 73 percent of its revenue from Ocean, 15 percent from Logistics & Services, and 10 percent from the Terminals & Towage segment. Maersk said it plans to grow the two landside segments at a disproportionate rate to ocean, including via acquisitions in inland logistics to create a more diversified business model and rebalanced operating profit. “We will continue to make the bolt-on acquisitions that add to the skill and capability to what we have, such as Performance Team in the US,” Skou said. Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler .

Maritime

Maersk evolution on track despite slowing non-ocean growth: Skou

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

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

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<div class="phx-topic"><p>The positive impact of the Gemini Cooperation network with partner Hapag-Lloyd that has carried through into 2026 will run into growing overcapacity exacerbated by a return to Suez Canal transits, Maersk CEO Vincent Clerc said Thursday. </p><p>While Gemini’s rollout one year ago drove up Maersk’s annual volume, delivered significant cost savings across the network, and generated a record 2025 performance in its terminals division, Clerc warned the industry was heading into a downturn driven by excess capacity. </p><p>"Whether it is through new ships that are coming in or through the return to Suez, we're going to have an overcapacity of anywhere from 4% to 8% in 2026,” the CEO said during an earnings call that followed the release of Maersk’s fourth quarter and 2025 financial results. </p><p>”If we return fast and full to Suez, we will see more pressure on the freight rate because there is a bigger gap that we need to close at once,” Clerc added. “If we have an orderly, slow, gradual return, we might be able to manage it better.”  </p><p>While Maersk’s solid interim earnings through 2025 ensured a positive full-year result, red ink made its first appearance in two years on the carrier’s quarterly balance sheet. The company also announced it will cut 1,000 jobs this year. </p><p>Maersk for the fourth quarter reported a $153 million loss in its container shipping segment as average rates fell 23% year over year to $2,046 per FEU, offsetting an 8% gain in volume to 3.4 million FEUs. Revenue in Q4 of $13.3 billion was down 8.7% year over year, and earnings before interest, taxes, amortization and depreciation (EBITDA) fell 49% to $1.8 billion. EBIT was down 94% at $100 million, while the carrier recorded zero net profit in Q4. </p><p>For the full year, revenue dropped 2.7% year over year to $54 billion, EBITDA was down 21% at $9.5 billion, EBIT of $3.5 billion fell 46%, and net profit of $2.9 billion was down 53% compared to 2024. </p><h3>Potential loss flagged for 2026 </h3><p>The severe impact of overcapacity on the market was illustrated in Maersk’s 2026 profitability forecast. Faced with a return to the Suez and new ship deliveries adding to industry overcapacity, the carrier has flagged a potential $1.5 billion loss in its full-year EBIT earnings for 2026. It would be the first operating loss Maersk has booked in 10 years. The top end of the profit guidance was set at $1 billion, $2.5 billion less than last year’s result. </p><p>With profitability falling and huge pressure on cost savings, the significant cost benefits achieved by Gemini in 2025 will be welcome. </p><p>“We have generated over $300 million in benefits in the fourth quarter, and we are now targeting $820 to $1.1 billion in annual benefits,” Clerc told analysts. </p><p>He said network savings are generated by more efficient use of vessels by sailing at slower speeds over shorter distances between hub ports, transporting more volume with the same capacity, and having shorter dwell times at berth. The lower bunker consumption from these measures translated to a cost saving of $150 million in the fourth quarter alone. </p><p>Gemini’s increased volume also had a highly positive impact on Maersk’s APM Terminals division, with revenue in Q4 of $1.4 billion that was up 13% year over year and volume increasing 8.4%, mainly on the Europe, North America and Latin America trade lanes. </p><h3>Strong global container demand </h3><p>The industry might be facing a growing overcapacity problem, but demand in 2026 is expected to grow between 2% and 4%; Maersk expects to grow its volume in line with the market. </p><p>“As we look ahead to 2026, we see a continuation of strong global container demand translating into a volume growth that we expect to land between 2% and 4% based on various scenarios,” Clerc said. </p><p>Maersk’s executives are also confident they have the tools in place to handle the imbalance in supply and demand. </p><p>“We have a strong balance sheet to weather the downturn in ocean, (but) the unknown is how deep and how long will it last,” Maersk CFO Patrick Jany said on the call, highlighting the significant number of old vessels that were not economically viable at current rate levels. </p><p>Jany said at some point, the unviable capacity would be scrapped, returned to charterers or idled.  </p><p>“I would expect this to happen this year, particularly in scenarios where the Red Sea reopens fully and fast, that will trigger every reaction,” he said. “Our view is not that we'll have three years of pain, but more that you will have one or two years of pain, and then the capacity will be taken out.”  </p><p><i>Contact Greg Knowler at </i><a href="mailto:greg.knowler@spglobal.com"><i>greg.knowler@spglobal.com</i></a>.   </p></div>

The positive impact of the Gemini Cooperation network with partner Hapag-Lloyd that has carried through into 2026 will run into growing overcapacity exacerbated by a return to Suez Canal transits, Maersk CEO Vincent Clerc said Thursday. While Gemini’s rollout one year ago drove up Maersk’s annual volume, delivered significant cost savings across the network, and generated a record 2025 performance in its terminals division, Clerc warned the industry was heading into a downturn driven by excess capacity. "Whether it is through new ships that are coming in or through the return to Suez, we're going to have an overcapacity of anywhere from 4% to 8% in 2026,” the CEO said during an earnings call that followed the release of Maersk’s fourth quarter and 2025 financial results. ”If we return fast and full to Suez, we will see more pressure on the freight rate because there is a bigger gap that we need to close at once,” Clerc added. “If we have an orderly, slow, gradual return, we might be able to manage it better.” While Maersk’s solid interim earnings through 2025 ensured a positive full-year result, red ink made its first appearance in two years on the carrier’s quarterly balance sheet. The company also announced it will cut 1,000 jobs this year. Maersk for the fourth quarter reported a $153 million loss in its container shipping segment as average rates fell 23% year over year to $2,046 per FEU, offsetting an 8% gain in volume to 3.4 million FEUs. Revenue in Q4 of $13.3 billion was down 8.7% year over year, and earnings before interest, taxes, amortization and depreciation (EBITDA) fell 49% to $1.8 billion. EBIT was down 94% at $100 million, while the carrier recorded zero net profit in Q4. For the full year, revenue dropped 2.7% year over year to $54 billion, EBITDA was down 21% at $9.5 billion, EBIT of $3.5 billion fell 46%, and net profit of $2.9 billion was down 53% compared to 2024. Potential loss flagged for 2026 The severe impact of overcapacity on the market was illustrated in Maersk’s 2026 profitability forecast. Faced with a return to the Suez and new ship deliveries adding to industry overcapacity, the carrier has flagged a potential $1.5 billion loss in its full-year EBIT earnings for 2026. It would be the first operating loss Maersk has booked in 10 years. The top end of the profit guidance was set at $1 billion, $2.5 billion less than last year’s result. With profitability falling and huge pressure on cost savings, the significant cost benefits achieved by Gemini in 2025 will be welcome. “We have generated over $300 million in benefits in the fourth quarter, and we are now targeting $820 to $1.1 billion in annual benefits,” Clerc told analysts. He said network savings are generated by more efficient use of vessels by sailing at slower speeds over shorter distances between hub ports, transporting more volume with the same capacity, and having shorter dwell times at berth. The lower bunker consumption from these measures translated to a cost saving of $150 million in the fourth quarter alone. Gemini’s increased volume also had a highly positive impact on Maersk’s APM Terminals division, with revenue in Q4 of $1.4 billion that was up 13% year over year and volume increasing 8.4%, mainly on the Europe, North America and Latin America trade lanes. Strong global container demand The industry might be facing a growing overcapacity problem, but demand in 2026 is expected to grow between 2% and 4%; Maersk expects to grow its volume in line with the market. “As we look ahead to 2026, we see a continuation of strong global container demand translating into a volume growth that we expect to land between 2% and 4% based on various scenarios,” Clerc said. Maersk’s executives are also confident they have the tools in place to handle the imbalance in supply and demand. “We have a strong balance sheet to weather the downturn in ocean, (but) the unknown is how deep and how long will it last,” Maersk CFO Patrick Jany said on the call, highlighting the significant number of old vessels that were not economically viable at current rate levels. Jany said at some point, the unviable capacity would be scrapped, returned to charterers or idled. “I would expect this to happen this year, particularly in scenarios where the Red Sea reopens fully and fast, that will trigger every reaction,” he said. “Our view is not that we'll have three years of pain, but more that you will have one or two years of pain, and then the capacity will be taken out.” Contact Greg Knowler at greg.knowler@spglobal.com .

Container lines

Gemini benefits face looming challenge from oversupplied market: Clerc

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

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

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

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

Energy projects

Project cargo

Breakbulk News

‘Lumpy’ project cargo demand to lead to two-tier MPV market

<div class="phx-topic abstract-wrapper"><p>Still, the company’s CFO cautioned that no one should “get out over their skis” from the standpoint of freight recovery expectations.</p></div>

Still, the company’s CFO cautioned that no one should “get out over their skis” from the standpoint of freight recovery expectations.

<div class="phx-topic"><p>Old Dominion Freight Lines (ODFL), one of the top US less-than-truckload (LTL) carriers, is “cautiously optimistic” about 2026 despite a decline in fourth-quarter revenue and volume, the company said Wednesday.  </p><p>The carrier believes the US economy and freight demand were showing signs of growth late in the fourth quarter, and that those trends continued through January. </p><p>“We are better positioned than any other carrier to capitalize on an improving economy,” ODFL CEO Marty Freeman said during the company’s fourth-quarter earnings call. “We’ve seen some positive signs that we’ve been really pleased with over the past couple of months that have been developing and then the release this week of the ISM, was certainly very positive to see and maybe is an indication of how things will be hopefully for the rest of the year.” </p><p>The ISM, or Institute for Supply Chain Management, reported a manufacturing index of 52.6 for January, up from 47.9 in December. Any figure above 50 indicates economic expansion, but the index had failed to do so for 26 consecutive months until last month. A manufacturing index greater than 47.5 over several months generally indicates an expansion of the overall economy, according to the ISM. </p><p>Industrial freight is more likely to move via LTL, reflecting its higher density and lower cubic footprint. Retail shipments, by contrast, tend to be lighter and more voluminous, often filling a trailer before reaching weight limits. </p><div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="a2e61684-cd67-4f71-a46d-bab789387eb5"></dynamic-object></div><p>ODFL said its shippers have also begun to feel more optimistic. </p><p>“We’ve had feedback that inventories are generally lower, and we are going to see some inventory replenishment,” Freeman said. “We move everything including the kitchen sink, so you got housing starts improving, you’ll [have] things like faucets and so forth with increased demand there.” </p><p>ODFL CFO Adam Satterfield added that shippers have said that increased consumer confidence and buying patterns will eventually result in higher overall LTL demand and volume. </p><p>“We’ve had some really good customer conversations in the sense of what they were anticipating their volumes might look like and the amount of business that they would tender to us,” he said on the call. “Then inventory needs to be replenished and those will all be good things that will find its way onto our trucks.” </p><h3>Q4 revenue down </h3><p>Total revenue for ODFL declined 5.7% year over year to nearly $1.3 billion in the fourth quarter. The company said the decrease was primarily due to a 10.7% decline in LTL tons per day. However, revenue per hundredweight — i.e. the revenue per 100 pounds of freight — rose 5.6% year over year, suggesting ODFL raised rates on shippers to grow its margins, sacrificing volume to do so. </p><p>Satterfield said ODFL is well-positioned to take advantage of the freight recovery when it happens because it has maintained what the company called “cost discipline in a challenging environment.” ODFL closed the year with 21,304 full-time employees, down 5.4% year over year, and it still has excess capacity to absorb a surge in freight. </p><p>Satterfield said ODFL is flexible enough to handle “significant volume growth” without disruption, which has caused the LTL carrier to win market share in previous freight rebounds. </p><p>“We’re definitely prepared for the upcycle,” he said. “We’ve got a little over 35% capacity in our service center network. We’re handling a little over 40,000 shipments per day right now and our network is built to handle more like 55,000 and even more.” </p><p>Still, Satterfield cautioned that no one should “get out over their skis” from the standpoint of recovery expectations. </p><p>“It remains to be seen if this really is going to lead into that spring surge that we would typically see,” he said. “We certainly feel like the stars are coming into alignment, but we felt that way before, and in particular about February and March of last year. So that’s why we continue to say we’re cautiously optimistic about how things might develop for this year.” </p><p><i>Contact Dan Ronan at </i><a href="mailto:contactdanronan@gmail.com"><i>contactdanronan@gmail.com</i></a>.</p></div>

Old Dominion Freight Lines (ODFL), one of the top US less-than-truckload (LTL) carriers, is “cautiously optimistic” about 2026 despite a decline in fourth-quarter revenue and volume, the company said Wednesday. The carrier believes the US economy and freight demand were showing signs of growth late in the fourth quarter, and that those trends continued through January. “We are better positioned than any other carrier to capitalize on an improving economy,” ODFL CEO Marty Freeman said during the company’s fourth-quarter earnings call. “We’ve seen some positive signs that we’ve been really pleased with over the past couple of months that have been developing and then the release this week of the ISM, was certainly very positive to see and maybe is an indication of how things will be hopefully for the rest of the year.” The ISM, or Institute for Supply Chain Management, reported a manufacturing index of 52.6 for January, up from 47.9 in December. Any figure above 50 indicates economic expansion, but the index had failed to do so for 26 consecutive months until last month. A manufacturing index greater than 47.5 over several months generally indicates an expansion of the overall economy, according to the ISM. Industrial freight is more likely to move via LTL, reflecting its higher density and lower cubic footprint. Retail shipments, by contrast, tend to be lighter and more voluminous, often filling a trailer before reaching weight limits. ODFL said its shippers have also begun to feel more optimistic. “We’ve had feedback that inventories are generally lower, and we are going to see some inventory replenishment,” Freeman said. “We move everything including the kitchen sink, so you got housing starts improving, you’ll [have] things like faucets and so forth with increased demand there.” ODFL CFO Adam Satterfield added that shippers have said that increased consumer confidence and buying patterns will eventually result in higher overall LTL demand and volume. “We’ve had some really good customer conversations in the sense of what they were anticipating their volumes might look like and the amount of business that they would tender to us,” he said on the call. “Then inventory needs to be replenished and those will all be good things that will find its way onto our trucks.” Q4 revenue down Total revenue for ODFL declined 5.7% year over year to nearly $1.3 billion in the fourth quarter. The company said the decrease was primarily due to a 10.7% decline in LTL tons per day. However, revenue per hundredweight — i.e. the revenue per 100 pounds of freight — rose 5.6% year over year, suggesting ODFL raised rates on shippers to grow its margins, sacrificing volume to do so. Satterfield said ODFL is well-positioned to take advantage of the freight recovery when it happens because it has maintained what the company called “cost discipline in a challenging environment.” ODFL closed the year with 21,304 full-time employees, down 5.4% year over year, and it still has excess capacity to absorb a surge in freight. Satterfield said ODFL is flexible enough to handle “significant volume growth” without disruption, which has caused the LTL carrier to win market share in previous freight rebounds. “We’re definitely prepared for the upcycle,” he said. “We’ve got a little over 35% capacity in our service center network. We’re handling a little over 40,000 shipments per day right now and our network is built to handle more like 55,000 and even more.” Still, Satterfield cautioned that no one should “get out over their skis” from the standpoint of recovery expectations. “It remains to be seen if this really is going to lead into that spring surge that we would typically see,” he said. “We certainly feel like the stars are coming into alignment, but we felt that way before, and in particular about February and March of last year. So that’s why we continue to say we’re cautiously optimistic about how things might develop for this year.” Contact Dan Ronan at contactdanronan@gmail.com .

Trucking News

Surface

ODFL ‘cautiously optimistic’ about LTL demand despite lackluster Q4

<div class="phx-topic abstract-wrapper"><p>The decision by the Panama Supreme Court has provoked angry responses from both the Chinese and Hong Kong governments, with Beijing warning that Panama would “pay a heavy price both politically and economically.”</p></div>

The decision by the Panama Supreme Court has provoked angry responses from both the Chinese and Hong Kong governments, with Beijing warning that Panama would “pay a heavy price both politically and economically.”

<div class="phx-topic"><p>Panama Ports Company (PPC) is seeking “extensive damages” after launching arbitration proceedings against the government of Panama following the decision of the country’s Supreme Court last week to void the company’s concessions to operate the Cristobal and Balboa ports. PPC had held the concessions for 28 years. </p><p>The port company, 90% controlled by Hutchison Port Holdings, a subsidiary of Hong Kong-listed conglomerate CK Hutchison, said Wednesday the Panamanian government has already started to take control of the terminals that bookend the Panama Canal even though the court decision has yet to be published and finalized. </p><p>“The steps taken by the state have included unexpected site visits and instructions that PPC provide unrestricted access to physical, commercial, and intellectual property and information, as well as to employees, on the basis that the state is systematizing and executing a port transition plan through coordinated actions of state authorities,” PPC said in a statement. </p><p>APM Terminals (AMPT), which was appointed by the Panama Maritime Authority <a href="https://www.joc.com/article/apmt-to-run-hutchisons-panama-terminals-on-interim-basis-after-court-ruling-6161534">as interim administrator of the two terminals a day after the court’s decision</a>, would not comment on whether it had taken part in the site visits or other actions following the court ruling. </p><p>“At this moment, we have no further comments to share other than what we have released on our website,” an APMT spokesperson said. “For any next steps we refer to the relevant authorities in Panama.” </p><p>CK Hutchison on Wednesday said it “continues to consult with its legal counsel and reserves all rights, including recourse to additional national and international legal proceedings.”  </p><h3>Beijing says Panama will ‘pay a heavy price’ </h3><p>The Supreme Court decision can only be delayed, not overturned, and legal proceedings such as those launched by PPC can linger for years and often go nowhere. The move appears to be more of an effort by Hutchison to show investors that it is exhausting all options even if there is no path forward.  </p><p>The decision by the Panamanian court has provoked an angry response from both the Chinese and Hong Kong governments, with Beijing’s Hong Kong and Macao Affairs Office warning Panama would “pay a heavy price both politically and economically.” </p><p>The Hong Kong government said the Panama government “should respect the spirit of contracts and provide a fair and just business environment for companies operating legally there, ensuring that the legitimate rights of enterprises are free from any interference.”  </p><p>Interestingly, in a separate case, a ruling three years ago by Panama’s Supreme Court resulted in the closure of a major copper mine in the country, although there seems to be <a href="https://nam11.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.msn.com%2Fen-us%2Fmoney%2Fother%2Fpanama-and-canada-are-caught-in-a-dispute-over-a-copper-mine%2Far-AA1UL4T1%3Focid%3DBingNewsSerp&amp;data=05%7C02%7Ckevin.saville2%40spglobal.com%7C4a5fd62251cd4285f25808de63f3221d%7C8f3e36ea80394b4081a77dc0599e8645%7C1%7C0%7C639058093052350394%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&amp;sdata=8gpwQrSg12fJdYx5%2FwrCwv4DiH9wtV%2B7213f6JROaOE%3D&amp;reserved=0">developments underway that could result in the mine’s reopening</a>. </p><p><i>Contact Keith Wallis at </i><a href="mailto:keithwallis@hotmail.com"><i>keithwallis@hotmail.com</i></a>.</p></div>

Panama Ports Company (PPC) is seeking “extensive damages” after launching arbitration proceedings against the government of Panama following the decision of the country’s Supreme Court last week to void the company’s concessions to operate the Cristobal and Balboa ports. PPC had held the concessions for 28 years. The port company, 90% controlled by Hutchison Port Holdings, a subsidiary of Hong Kong-listed conglomerate CK Hutchison, said Wednesday the Panamanian government has already started to take control of the terminals that bookend the Panama Canal even though the court decision has yet to be published and finalized. “The steps taken by the state have included unexpected site visits and instructions that PPC provide unrestricted access to physical, commercial, and intellectual property and information, as well as to employees, on the basis that the state is systematizing and executing a port transition plan through coordinated actions of state authorities,” PPC said in a statement. APM Terminals (AMPT), which was appointed by the Panama Maritime Authority as interim administrator of the two terminals a day after the court’s decision , would not comment on whether it had taken part in the site visits or other actions following the court ruling. “At this moment, we have no further comments to share other than what we have released on our website,” an APMT spokesperson said. “For any next steps we refer to the relevant authorities in Panama.” CK Hutchison on Wednesday said it “continues to consult with its legal counsel and reserves all rights, including recourse to additional national and international legal proceedings.” Beijing says Panama will ‘pay a heavy price’ The Supreme Court decision can only be delayed, not overturned, and legal proceedings such as those launched by PPC can linger for years and often go nowhere. The move appears to be more of an effort by Hutchison to show investors that it is exhausting all options even if there is no path forward. The decision by the Panamanian court has provoked an angry response from both the Chinese and Hong Kong governments, with Beijing’s Hong Kong and Macao Affairs Office warning Panama would “pay a heavy price both politically and economically.” The Hong Kong government said the Panama government “should respect the spirit of contracts and provide a fair and just business environment for companies operating legally there, ensuring that the legitimate rights of enterprises are free from any interference.” Interestingly, in a separate case, a ruling three years ago by Panama’s Supreme Court resulted in the closure of a major copper mine in the country, although there seems to be developments underway that could result in the mine’s reopening . Contact Keith Wallis at keithwallis@hotmail.com .

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<div class="phx-topic abstract-wrapper"><p>Spot intermodal savings reached record levels in the fourth quarter, but railroads might hold back on raising rates as the disruptive winter weather has skewed trucking rates.  </p></div>

Spot intermodal savings reached record levels in the fourth quarter, but railroads might hold back on raising rates as the disruptive winter weather has skewed trucking rates.

<div class="phx-topic"><p>US shippers saved 25.6% on spot market freight — a record— and 25.4% on contract loads in the fourth quarter by using domestic intermodal instead of long-haul trucking amid a rise in truckload spot rates, according to the latest <i>Journal of Commerce</i> <a href="https://www.joc.com/resources/special-reports/intermodal-savings-index">Intermodal Savings Index</a> (ISI).      </p><p>It’s the first time in the history of the ISI, dating back to 2016, that the spot market index was higher than the contract index.  </p><p>The driver was unusually frigid weather and snowstorms in the US in December that caused spot truckload rates to jump, while railroads have continued to keep spot market rates low. Railroads tend to lag truckload rates, jacking up pricing only after there is strong enough evidence that truckload markets have inflected toward motor carriers. </p><p>Given the severe winter weather in January, it remains to be seen whether railroads take the opportunity to increase spot rates in the first quarter or hold back until normal weather conditions return and gauge the trucking market only then. </p><p>North American railroads hauled 2.29 million domestic containers in the fourth quarter, up 2.2% compared with a year earlier, according to the Intermodal Association of North America (IANA). The results were slightly higher than the <i>Journal of Commerce</i> forecast of 2.26 million loads for the fourth quarter. There was an additional 1.5 working days in the fourth quarter compared with the same quarter of 2024, according to a <i>Journal of Commerce</i> calculation, which assigns weightings to each day of the week, and holidays, based on historical data from the US Surface Transportation Board. </p><p>The Spot ISI averaged 125.6 in the fourth quarter, up from 120.2 a year earlier. The Contract ISI slipped to 125.4 from 126.4 a year earlier.    </p><p>Index values above 100 indicate intermodal is the more cost-effective mode; the higher the index number, the greater the savings. A spot ISI of 125.6 translates to a 25.6% savings on intermodal versus truckload, while a contract ISI of 125.4 implies a 25.4% savings.    </p><p>All calculations assume local drayage at origin and destination, so shippers with distribution centers more than 30 minutes from the terminal will save less than the index values.  </p><div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9f0dff14-0731-4ad3-859c-d093757d1ed4"></dynamic-object></div><p>Per-mile rates show how the trucking market impacted results. Spot truckload rates jumped 20 cents to $2.15 per mile on indexed lanes between Sept. 30 and Dec. 31, while spot intermodal rates on the same lanes were unchanged. Contract truckload rates increased by a penny per mile during the quarter, while contract intermodal rates rose by a half-cent in the same period. </p><p>In terms of raw dollars, intermodal shippers saved an average of $800 per container on the spot market in the fourth quarter compared with truckload, and $870 per container on the contract market. In the fourth quarter of 2024, the average spot intermodal load saved $700 per container, with the contract load saving $925 per container.  </p><h3>Intermodal will follow truckload recovery </h3><p>Two of the top US domestic intermodal providers said the market did not turn around enough in the fourth quarter to give them pricing leverage, but it will once the truckload market rebounds. Based on past cycles, truckload spot markets tend to move first, followed by truckload contract rates, and then intermodal prices shift higher once shippers begin to feel capacity constraints or budget pressure. </p><p>“[It’ll take] a little more time before we see intermodal prices catch up to what we expect in truckload,” said Mark Rourke, CEO of Schneider, on a Jan. 29 earnings call. </p><p>Jim Filter, executive vice president of Schneider, said the company will capitalize on intermodal opportunities when the truckload market improves and “inventory levels are starting to be replenished.”  </p><p>The top US intermodal provider, J.B. Hunt, also did not call for an immediate rise in intermodal prices. </p><p>“We’re a little bit hesitant to suggest that we think there’s some big pricing opportunity, but we will be quick to identify when we see the market shift,” Darren Field, president of J.B. Hunt’s intermodal division, said on a Jan. 15 earnings call. </p><p>Shippers have told the <i>Journal of Commerce</i> that there are some minor rate increases on west-to-east rail freight, particularly originating in Southern California, but pricing remains flattish in other origins such as the Pacific Northwest and Mexico.  </p><p><i>Contact Ari Ashe at </i><a href="mailto:ari.ashe@spglobal.com"><i>ari.ashe@spglobal.com</i></a><i>.</i>      </p><p><i>The data behind the Contract ISI and Spot ISI is available to Journal of Commerce subscribers with a Gold-tier subscription.</i>   </p></div>

US shippers saved 25.6% on spot market freight — a record— and 25.4% on contract loads in the fourth quarter by using domestic intermodal instead of long-haul trucking amid a rise in truckload spot rates, according to the latest Journal of Commerce Intermodal Savings Index (ISI). It’s the first time in the history of the ISI, dating back to 2016, that the spot market index was higher than the contract index. The driver was unusually frigid weather and snowstorms in the US in December that caused spot truckload rates to jump, while railroads have continued to keep spot market rates low. Railroads tend to lag truckload rates, jacking up pricing only after there is strong enough evidence that truckload markets have inflected toward motor carriers. Given the severe winter weather in January, it remains to be seen whether railroads take the opportunity to increase spot rates in the first quarter or hold back until normal weather conditions return and gauge the trucking market only then. North American railroads hauled 2.29 million domestic containers in the fourth quarter, up 2.2% compared with a year earlier, according to the Intermodal Association of North America (IANA). The results were slightly higher than the Journal of Commerce forecast of 2.26 million loads for the fourth quarter. There was an additional 1.5 working days in the fourth quarter compared with the same quarter of 2024, according to a Journal of Commerce calculation, which assigns weightings to each day of the week, and holidays, based on historical data from the US Surface Transportation Board. The Spot ISI averaged 125.6 in the fourth quarter, up from 120.2 a year earlier. The Contract ISI slipped to 125.4 from 126.4 a year earlier. Index values above 100 indicate intermodal is the more cost-effective mode; the higher the index number, the greater the savings. A spot ISI of 125.6 translates to a 25.6% savings on intermodal versus truckload, while a contract ISI of 125.4 implies a 25.4% savings. All calculations assume local drayage at origin and destination, so shippers with distribution centers more than 30 minutes from the terminal will save less than the index values. Per-mile rates show how the trucking market impacted results. Spot truckload rates jumped 20 cents to $2.15 per mile on indexed lanes between Sept. 30 and Dec. 31, while spot intermodal rates on the same lanes were unchanged. Contract truckload rates increased by a penny per mile during the quarter, while contract intermodal rates rose by a half-cent in the same period. In terms of raw dollars, intermodal shippers saved an average of $800 per container on the spot market in the fourth quarter compared with truckload, and $870 per container on the contract market. In the fourth quarter of 2024, the average spot intermodal load saved $700 per container, with the contract load saving $925 per container. Intermodal will follow truckload recovery Two of the top US domestic intermodal providers said the market did not turn around enough in the fourth quarter to give them pricing leverage, but it will once the truckload market rebounds. Based on past cycles, truckload spot markets tend to move first, followed by truckload contract rates, and then intermodal prices shift higher once shippers begin to feel capacity constraints or budget pressure. “[It’ll take] a little more time before we see intermodal prices catch up to what we expect in truckload,” said Mark Rourke, CEO of Schneider, on a Jan. 29 earnings call. Jim Filter, executive vice president of Schneider, said the company will capitalize on intermodal opportunities when the truckload market improves and “inventory levels are starting to be replenished.” The top US intermodal provider, J.B. Hunt, also did not call for an immediate rise in intermodal prices. “We’re a little bit hesitant to suggest that we think there’s some big pricing opportunity, but we will be quick to identify when we see the market shift,” Darren Field, president of J.B. Hunt’s intermodal division, said on a Jan. 15 earnings call. Shippers have told the Journal of Commerce that there are some minor rate increases on west-to-east rail freight, particularly originating in Southern California, but pricing remains flattish in other origins such as the Pacific Northwest and Mexico. Contact Ari Ashe at ari.ashe@spglobal.com . The data behind the Contract ISI and Spot ISI is available to Journal of Commerce subscribers with a Gold-tier subscription.

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