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<div class="phx-topic abstract-wrapper">U.S. rail traffic is returning to normal after one of the coldest winters in recent memory, Bradley Thrasher, vice president and general manager of industrial products at the Union Pacific Railroad, told the Los Angeles Transportation Club April 15.
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U.S. rail traffic is returning to normal after one of the coldest winters in recent memory, Bradley Thrasher, vice president and general manager of industrial products at the Union Pacific Railroad, told the Los Angeles Transportation Club April 15.

<div>U.S. rail traffic is returning to normal after one of the coldest winters in recent memory, Bradley Thrasher, vice president and general manager of industrial products at the Union Pacific Railroad, told the Los Angeles Transportation Club April 15.Home building, conversion of highway freight to rail, energy extraction and international trade will be the main drivers of freight volume for the remainder of the year. Manufacturing should also contribute to the growth.Economists at the beginning of the year were confidently predicting a return to more normal growth as the recovery entered its fifth year. However, the economy, including the freight...

U.S. rail traffic is returning to normal after one of the coldest winters in recent memory, Bradley Thrasher, vice president and general manager of industrial products at the Union Pacific Railroad, told the Los Angeles Transportation Club April 15. Home building, conversion of highway freight to rail, energy extraction and international trade will be the main drivers of freight volume for the remainder of the year. Manufacturing should also contribute to the growth. Economists at the beginning of the year were confidently predicting a return to more normal growth as the recovery entered its fifth year. However, the economy, including the freight sector, was set back by months of relentless cold weather and snow in the eastern half of the nation. Weather in the East affected rail traffic throughout the country. Intermodal trains were thrown off schedule, causing equipment shortages and cargo delays at ports on both coasts. Railroads could not build full trains, maintenance and repair work on tracks was interrupted and train velocities slowed as outside activities in some regions were curtailed by below-zero temperatures. Now that spring weather has arrived and the system is once again fluid, railroads will be able to satisfy pent-up demand for consumer and industrial products, Thrasher said. The housing industry, which expanded by 20 percent last year, is back on a growth track, and that will translate to more freight. About 8 percent of UP’s shipments are tied to housing, he noted. Railroads continue to attract freight from the highways. Last year was the fifth consecutive year of growth in freight conversion from highways, with growth in that sector totaling 36 percent from 2008 to 2013, he said. Rapid expansion in oil and natural gas extraction in shale plays is contributing to growth in rail freight volume in several ways. Railroads are carrying large volumes of frac sand and pipe to the oil fields, while outbound movement of energy products is increasing. Companies that manufacture pipe for the oil industry have announced intentions to build 11 new plants, Thrasher said. Construction of refineries and petro-chemical plants is also increasing, especially in the U.S. Gulf region. The surge in natural gas extraction has made energy prices among the cheapest in the industrialized world, and this is leading to growth in a number of energy-intensive manufacturing industries, such as steel and plastics. A growing share of the investment in these sectors is foreign direct investment from other countries. Lower natural gas prices are helping U.S. manufacturers to compete globally. The total cost of manufacturing, including wages and energy consumption, is now higher in Canada, the United Kingdom, Japan, France and Germany than in the U.S. The total cost of manufacturing in those countries is as much as 19 percent higher than at U.S. factories. China, once the world’s low-cost producer, has manufacturing costs that now approach 93 percent of those in the U.S., Thrasher said. A sure indicator of the growing importance of manufacturing in the U.S. is that industrial production, which used to lag behind growth in gross domestic product because of high wages in the U.S. and outsourcing, is projected to increase 3.2 percent this year, compared to GDP growth of 2.7 percent, he said. Railroads are investing billions of dollars in tracks, equipment, facilities and safety to keep up with the growing freight demand. UP in 2013 spent, and again in 2014 is spending, almost $4 billion in its capital programs. Also, UP is taking locomotives out of storage to meet rising demand for capacity. International intermodal freight is expected to increase in line with growth in imports and exports, with the projection for growth in containerized trade to be about 4 to 5 percent this year. Contact Bill Mongelluzzo at bmongelluzzo@joc.com and follow him on Twitter: @billmongelluzzo .

US Rail Traffic Returning to Normal

<div class="phx-topic abstract-wrapper">A boost in project cargo demand is expected as delayed mining projects in the country start to come onstream in the coming years. </div>

A boost in project cargo demand is expected as delayed mining projects in the country start to come onstream in the coming years.

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<div class="phx-topic">The release of several previously stalled permits is setting up a mining boom across Mexico that could trigger a wave of breakbulk and project cargo activity. Restarting these mine projects could necessitate shipments of power generation equipment, heavy machinery and other project cargo in the near term, while mine operations and production could result in ongoing shipments of minerals and maintenance supplies. Over $11 billion in mining projects were reactivated in November following Mexican federal policy changes related to the approval of environmental and water permits needed for the projects to move forward. The mining projects are focused in the Mexican states of Zacatecas, Sonora, Chihuahua and Durango. Mexico is a key global producer of gold, copper, zinc and critical minerals. Fernando Aboitiz, head of the Coordination Unit for Extractive Industries at Mexico’s Ministry of Economy, told attendees at the International Mining Convention 2025 in Acapulco in November that 110 of 176 previously blocked permits in the mining sector have been approved so far, leaving 66 still pending. Aboitiz said the backlog could be cleared by mid-2026. According to the latest data from Mexican industry association Cámara Minera de Mexico (CAMIMEX), there were 574 mining projects in 30 states in Mexico in 2024. Of those, 225 were in the exploration phase, another 225 were in the production phase, 27 were in development, 85 were suspended, and 12 were in the closure phase. <h3>‘Sustained surge’ in cargo expected </h3>Juan Ignacio Lopez, CEO of King Ocean Gulf Alliance LLC (KOGA), a Houston-based multipurpose carrier that transports cargoes including mining supplies, steel, bulk chemicals, power generation equipment, and heavy machinery, told the Journal of Commerce that he anticipates growth in both short- and long-term cargo activity as Mexico’s mining activity picks up. “The good thing about a mining boom is that it creates a sustained surge in breakbulk and project cargo demands,” he said. Constructing these mines will require significant amounts of structural steel, heavy equipment for processing and excavating, and power generation equipment for the plants that supply power to the mines, Lopez said. “For us in particular, I think we’ll see increased moves of large mining equipment — from the US, from Brazil, Columbia and Panama — and higher volumes of cargo moving through the main Mexican ports for mining,” he said, citing the ports of Altamira and Veracruz along the Gulf and Manzanillo on the Pacific. Once the mines begin operations, Lopez expects to see more outbound shipments of minerals and other commodities. “That will also allow us to secure some contracts that will tie us to these mines and the suppliers, and to have a regular flow of those cargo movements between the Americas and into and out of Mexico,” he said. The mines will need to consistently import consumables to operate, Lopez said. That includes regularly replacing trucks, tires and spare parts for heavy equipment, while coal-burning power plants will require continuous shipments of coal and other supplies. “Those are things we’ll continuously move while the mine is working,” he said. As the mines produce minerals and other commodities, that output will need to be transported. “That creates an opportunity for carriers to move thousands of tons of minerals coming out of those mines,” Lopez said. Before mining activity picks up, carriers will need to prepare for the mines’ long-term cargo needs by securing regular sailings into and out of Mexico, Lopez said. That’s because whereas mine construction will produce enough project cargo and heavy equipment to fill up ships in the short term, sustaining operational needs and production output will require smaller shipments going to and from these mines. “Those are not volumes that can justify an entire ship. So you want to start looking for base cargoes that will put you in Mexico with certain regularity,” Lopez said, adding that KOGA already has regular customers in Mexico that ship other commodities. Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>. </div>

The release of several previously stalled permits is setting up a mining boom across Mexico that could trigger a wave of breakbulk and project cargo activity. Restarting these mine projects could necessitate shipments of power generation equipment, heavy machinery and other project cargo in the near term, while mine operations and production could result in ongoing shipments of minerals and maintenance supplies. Over $11 billion in mining projects were reactivated in November following Mexican federal policy changes related to the approval of environmental and water permits needed for the projects to move forward. The mining projects are focused in the Mexican states of Zacatecas, Sonora, Chihuahua and Durango. Mexico is a key global producer of gold, copper, zinc and critical minerals. Fernando Aboitiz, head of the Coordination Unit for Extractive Industries at Mexico’s Ministry of Economy, told attendees at the International Mining Convention 2025 in Acapulco in November that 110 of 176 previously blocked permits in the mining sector have been approved so far, leaving 66 still pending. Aboitiz said the backlog could be cleared by mid-2026. According to the latest data from Mexican industry association Cámara Minera de Mexico (CAMIMEX), there were 574 mining projects in 30 states in Mexico in 2024. Of those, 225 were in the exploration phase, another 225 were in the production phase, 27 were in development, 85 were suspended, and 12 were in the closure phase. ‘Sustained surge’ in cargo expected Juan Ignacio Lopez, CEO of King Ocean Gulf Alliance LLC (KOGA), a Houston-based multipurpose carrier that transports cargoes including mining supplies, steel, bulk chemicals, power generation equipment, and heavy machinery, told the Journal of Commerce that he anticipates growth in both short- and long-term cargo activity as Mexico’s mining activity picks up. “The good thing about a mining boom is that it creates a sustained surge in breakbulk and project cargo demands,” he said. Constructing these mines will require significant amounts of structural steel, heavy equipment for processing and excavating, and power generation equipment for the plants that supply power to the mines, Lopez said. “For us in particular, I think we’ll see increased moves of large mining equipment — from the US, from Brazil, Columbia and Panama — and higher volumes of cargo moving through the main Mexican ports for mining,” he said, citing the ports of Altamira and Veracruz along the Gulf and Manzanillo on the Pacific. Once the mines begin operations, Lopez expects to see more outbound shipments of minerals and other commodities. “That will also allow us to secure some contracts that will tie us to these mines and the suppliers, and to have a regular flow of those cargo movements between the Americas and into and out of Mexico,” he said. The mines will need to consistently import consumables to operate, Lopez said. That includes regularly replacing trucks, tires and spare parts for heavy equipment, while coal-burning power plants will require continuous shipments of coal and other supplies. “Those are things we’ll continuously move while the mine is working,” he said. As the mines produce minerals and other commodities, that output will need to be transported. “That creates an opportunity for carriers to move thousands of tons of minerals coming out of those mines,” Lopez said. Before mining activity picks up, carriers will need to prepare for the mines’ long-term cargo needs by securing regular sailings into and out of Mexico, Lopez said. That’s because whereas mine construction will produce enough project cargo and heavy equipment to fill up ships in the short term, sustaining operational needs and production output will require smaller shipments going to and from these mines. “Those are not volumes that can justify an entire ship. So you want to start looking for base cargoes that will put you in Mexico with certain regularity,” Lopez said, adding that KOGA already has regular customers in Mexico that ship other commodities. Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Policy shift clears way for surge in Mexican mining projects, cargo activity

<div class="phx-topic abstract-wrapper">The ubiquity of WiseTech’s flagship platform in the forwarding market has placed a target on its back — one that grew larger with a significant change last week in how it prices its product.</div>

The ubiquity of WiseTech’s flagship platform in the forwarding market has placed a target on its back — one that grew larger with a significant change last week in how it prices its product.

<div class="phx-topic">The number of complaints from forwarders about <a href="https://www.joc.com/article/wisetech-pricing-change-tests-shippers-willingness-to-absorb-tech-costs-6127788">last week’s pricing model change</a> by software provider WiseTech Global is an indication that the company’s flagship product has reached a level of market penetration that many technology companies can only dream of. There’s a saying in technology circles that software companies want their products to be so successful that everyone grumbles about them. That scenario generally only occurs when a product is so ubiquitous that it’s hard to envision an industry using anything else. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6133280_0.1.jpg"></img></div>CargoWise occupies that place in the world of forwarding. Simply put, most forwarders of any size and scale are using CargoWise for something, whether it be back-office accounting, transportation management, trade compliance or some mix of all three. By some estimates, CargoWise has as much as a 70% share of the forwarding software market, dwarfing the market share that even the largest forwarder, DSV (a current CargoWise customer) has over the logistics industry. Which means that WiseTech Global, with a $16 billion market capitalization, has a more dominant position in its market than its largest customer — with a $60 billion market cap – has in its market. That explains, in part, why something as seemingly banal as a change in the way WiseTech prices its product has created such a furor. Over the past three decades, a small software provider to Australian forwarders has morphed into a global technology powerhouse, a brand everyone loves to hate, because so many people must use its products. WiseTech’s fortress is, in part, built around a string of acquisitions of country-specific customs software vendors it made over the past dozen years. Those acquisitions give WiseTech direct connections to customs authorities that its competitors mostly lack, allowing its customers to remain compliant in a range of export and import markets. The importance of this network of customs capabilities can’t be understated — without it, forwarders struggle to help their customers clear regulatory authorities in key markets. That, along with general ledger and accounting functions upon which many forwarders base their operations, creates a scenario that makes it difficult for forwarders to switch to other solutions. As one forwarder put it to the Journal of Commerce: “It would be like ripping out a person’s circulatory system while the person was still alive.” <h3>No meaningful competition </h3>There is more to WiseTech’s dominance than its own ascent. A number of forwarding software vendors have, over the years, had designs encroaching on WiseTech’s turf. The list is not long, but it includes more than a dozen names, from sizable incumbent rivals such as Descartes, Softlink and Magaya, to upstarts that emerged in the past decade, including GoFreight and NewAge, to even newer entrants such as FreightSuite and Clear.ai. In addition, there are a number of regional providers that tend to focus on forwarders in their geographic market, most notably Riege in Germany. All of those providers collectively have failed to alter WiseTech’s trajectory, even as concerns grew from customers over WiseTech’s annual price increases and its sluggishness in integrating the products from its acquisitions. A new dimension to those concerns arose <a href="https://www.joc.com/article/wisetech-makes-2-billion-gamble-on-overturning-complicated-software-history-6013221">this past May when WiseTech made its biggest ever acquisition</a>, a $2.1 billion deal for E2open, a logistics software vendor that catered primarily to shippers. That enabled WiseTech to offer products directly to the customers of its core CargoWise users. Coupled with the upheaval from the pricing change, and an expectation from most CargoWise customers that the new pricing model would raise technology costs above the normal annual price increases, fully leveraging E2open would seemingly force forwarders to reconsider their use of CargoWise, if that is truly an option. For many, it won’t be. And so, if the anger around the pricing change model eventually passes without a wholesale loss of its customer base, that will be a sign that WiseTech has indeed reached escape velocity, and that the forwarding world is more dependent on the software provider than it had believed. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>.</div>

The number of complaints from forwarders about last week’s pricing model change by software provider WiseTech Global is an indication that the company’s flagship product has reached a level of market penetration that many technology companies can only dream of. There’s a saying in technology circles that software companies want their products to be so successful that everyone grumbles about them. That scenario generally only occurs when a product is so ubiquitous that it’s hard to envision an industry using anything else. CargoWise occupies that place in the world of forwarding. Simply put, most forwarders of any size and scale are using CargoWise for something, whether it be back-office accounting, transportation management, trade compliance or some mix of all three. By some estimates, CargoWise has as much as a 70% share of the forwarding software market, dwarfing the market share that even the largest forwarder, DSV (a current CargoWise customer) has over the logistics industry. Which means that WiseTech Global, with a $16 billion market capitalization, has a more dominant position in its market than its largest customer — with a $60 billion market cap – has in its market. That explains, in part, why something as seemingly banal as a change in the way WiseTech prices its product has created such a furor. Over the past three decades, a small software provider to Australian forwarders has morphed into a global technology powerhouse, a brand everyone loves to hate, because so many people must use its products. WiseTech’s fortress is, in part, built around a string of acquisitions of country-specific customs software vendors it made over the past dozen years. Those acquisitions give WiseTech direct connections to customs authorities that its competitors mostly lack, allowing its customers to remain compliant in a range of export and import markets. The importance of this network of customs capabilities can’t be understated — without it, forwarders struggle to help their customers clear regulatory authorities in key markets. That, along with general ledger and accounting functions upon which many forwarders base their operations, creates a scenario that makes it difficult for forwarders to switch to other solutions. As one forwarder put it to the Journal of Commerce: “It would be like ripping out a person’s circulatory system while the person was still alive.” No meaningful competition There is more to WiseTech’s dominance than its own ascent. A number of forwarding software vendors have, over the years, had designs encroaching on WiseTech’s turf. The list is not long, but it includes more than a dozen names, from sizable incumbent rivals such as Descartes, Softlink and Magaya, to upstarts that emerged in the past decade, including GoFreight and NewAge, to even newer entrants such as FreightSuite and Clear.ai. In addition, there are a number of regional providers that tend to focus on forwarders in their geographic market, most notably Riege in Germany. All of those providers collectively have failed to alter WiseTech’s trajectory, even as concerns grew from customers over WiseTech’s annual price increases and its sluggishness in integrating the products from its acquisitions. A new dimension to those concerns arose this past May when WiseTech made its biggest ever acquisition , a $2.1 billion deal for E2open, a logistics software vendor that catered primarily to shippers. That enabled WiseTech to offer products directly to the customers of its core CargoWise users. Coupled with the upheaval from the pricing change, and an expectation from most CargoWise customers that the new pricing model would raise technology costs above the normal annual price increases, fully leveraging E2open would seemingly force forwarders to reconsider their use of CargoWise, if that is truly an option. For many, it won’t be. And so, if the anger around the pricing change model eventually passes without a wholesale loss of its customer base, that will be a sign that WiseTech has indeed reached escape velocity, and that the forwarding world is more dependent on the software provider than it had believed. Contact Eric Johnson at eric.johnson@spglobal.com .

CargoWise’s pricing model change could mark final milestone in market ascent

<div class="phx-topic abstract-wrapper">The carrier this week said a new service it is launching is “designed to enhance reliability and significantly improve transit times” between US Gulf ports, Central America and the Caribbean.</div>

The carrier this week said a new service it is launching is “designed to enhance reliability and significantly improve transit times” between US Gulf ports, Central America and the Caribbean.

<div class="phx-topic">Seaboard Marine is revamping its US Gulf Coast network to consolidate port calls on its short-sea services. The move comes as US trade with Central America remains elevated but flat since 2022 and faces new changes under the Trump administration. Seaboard this week said that it will launch a new Gulf service “designed to enhance reliability and significantly improve transit times” between US Gulf ports, Central America and the Caribbean. The new service’s rotation includes Houston and New Orleans, while its southern rotation includes Honduras, Guatemala, Kingston, Colombia, Panama and Costa Rica. Seaboard already offered two services from Houston to northern and southern Central America, a separate service between Houston and Kingston and a Central America service from New Orleans, according to its last service guide. Seaboard did not respond to a request for comment about whether the new service affects the other services. <h3>CAFTA play </h3>The new Gulf service largely covers countries under the Central America Free Trade Agreement (CAFTA), which was implemented beginning in 2006 and updated in 2009 to include the Dominican Republic. The trade pact initially lowered tariffs on US exports to the participating nations, with further reductions throughout the course of the agreement. US exports to CAFTA-DR countries peaked at $4.6 billion in June 2022 and were at $4.4 billion this past March, when US imports from member countries hit a new high of $3.8 billion, according to Census Bureau data. The Trump administration this year included CAFTA members on the list of countries hit by the 10% reciprocal tariffs announced in April, with exemptions made for goods covered under CAFTA. Most of those countries negotiated subsequent deals as of November to avoid the new tariffs. Nicaragua, however, faces the loss of its CAFTA exemptions over the next two years due to a US Trade Representative action citing the country’s human rights and labor policies. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Seaboard Marine is revamping its US Gulf Coast network to consolidate port calls on its short-sea services. The move comes as US trade with Central America remains elevated but flat since 2022 and faces new changes under the Trump administration. Seaboard this week said that it will launch a new Gulf service “designed to enhance reliability and significantly improve transit times” between US Gulf ports, Central America and the Caribbean. The new service’s rotation includes Houston and New Orleans, while its southern rotation includes Honduras, Guatemala, Kingston, Colombia, Panama and Costa Rica. Seaboard already offered two services from Houston to northern and southern Central America, a separate service between Houston and Kingston and a Central America service from New Orleans, according to its last service guide. Seaboard did not respond to a request for comment about whether the new service affects the other services. CAFTA play The new Gulf service largely covers countries under the Central America Free Trade Agreement (CAFTA), which was implemented beginning in 2006 and updated in 2009 to include the Dominican Republic. The trade pact initially lowered tariffs on US exports to the participating nations, with further reductions throughout the course of the agreement. US exports to CAFTA-DR countries peaked at $4.6 billion in June 2022 and were at $4.4 billion this past March, when US imports from member countries hit a new high of $3.8 billion, according to Census Bureau data. The Trump administration this year included CAFTA members on the list of countries hit by the 10% reciprocal tariffs announced in April, with exemptions made for goods covered under CAFTA. Most of those countries negotiated subsequent deals as of November to avoid the new tariffs. Nicaragua, however, faces the loss of its CAFTA exemptions over the next two years due to a US Trade Representative action citing the country’s human rights and labor policies. Contact Michael Angell at michael.angell@spglobal.com .

Seaboard Marine revamps Gulf service to combine calls in Central America

<div class="phx-topic abstract-wrapper">New analysis shows a systematic displacement of tonnage from primary to secondary trade lanes has occurred over the past two years, while a shortage of capacity is looming over the smaller shipping segment. </div>

New analysis shows a systematic displacement of tonnage from primary to secondary trade lanes has occurred over the past two years, while a shortage of capacity is looming over the smaller shipping segment.

<div class="phx-topic">The massive injection of larger vessels into the Asia-Europe and Asia-Mediterranean trades over the past two years has pushed smaller vessels into the trans-Atlantic and Latin America corridors, spreading structural overcapacity to secondary lanes. However, despite more than 1.7 million TEUs of new tonnage set to be delivered in 2026, mostly in the 15,000-to-24,000-TEU range, there is a growing mismatch in terms of the size of ships needed, with vessels in the sub-5,000-TEU segment — the backbone of intra-regional and feeder networks — aging rapidly, according to new analysis. A systematic displacement of tonnage from primary to secondary trade lanes over the past two years was driven by extreme outward pressure from the Red Sea diversions, drought in the Panama Canal and the reshuffling of alliances in the first half of 2025, according to Sea-Intelligence Maritime Analysis. “To maintain weekly service frequency while navigating the longer sailing distances on Asia-Europe, carriers were forced to inject significant additional tonnage into Asia-North Europe,” Alan Murphy, CEO of Sea-Intelligence, wrote in this week’s Sunday Spotlight newsletter. The injection of so much capacity triggered a massive downstream effect. As carriers introduced new 24,000-TEU vessels into the extended North Europe services, the existing 14,000-to-20,000-TEU vessels were cascaded directly into the Asia-Mediterranean trade lane. In the trans-Pacific, the capacity management on the Asia-North America West and East coast trades through 2024 was operational in nature as carriers shuffled tonnage between the two trade lanes to mitigate Panama Canal draft restrictions, US port labor disruptions and the after-effects of the pandemic-induced volatility. The net effect was high movement of ships but not much change in capacity. In February of this year, the launch of new alliance structures — Gemini Cooperation, Premier Alliance and Mediterranean Shipping Co. as a standalone venture — provided the catalyst for a massive network shakeup, Sea-Intelligence noted. Carriers broke up established service loops and repositioned vessels globally to fit the new service networks. Volatile demand on Asia-North America West Coast saw a net reduction of 427,432 TEUs in the first half of 2025 as carriers blanked sailings to try to support rates, Murphy noted in the Sunday Spotlight. At the same time, the rapid growth on Asia-Mediterranean subsided, with Murphy surmising that after 18 months of absorbing cascaded tonnage from Asia-North Europe, the trade lane had likely reached a saturation point. In the first half of this year, the net capacity growth into Asia-Mediterranean decelerated by 79% compared with 2024. <h3>Steady operational state </h3>By the second half of 2025, the new alliance networks had reached a relatively steady operational state with the Mediterranean-North America East Coast trade lane emerging as a key cascading corridor, absorbing 127,686 TEUs in the second half, with most of that capacity from the Asia-Mediterranean trade, the Sunday Spotlight noted. A total of 14 vessels were shifted in the second half, 11 of those of 14,000 to 15,000 TEUs. Asia-East Coast South America (ECSA) was the next biggest net gainer in the second half, absorbing 112,998 TEUs. Most of that was from the two Asia-North America trade lanes that cascaded a combined 283,946 TEUs. A total of 32 vessels were shifted, with 72% of them in the 8,000- to 14,000-TEU segment. But Murphy noted that the nature of the growth in capacity was fundamentally different from the previous year, with 97% of the vessels entering the Asia-East Coast South America trade taking up permanent employment there and not being returned to their previous routes. “This meant that Asia-ECSA became a seemingly preferred destination for mid-size tonnage of 8,000-14,000 TEU vessels that had been cycled out of the main east-west trade lanes,” he said. As the dust settles from the alliance reshuffling of capacity, new analysis from consultancy MDS Transmodal notes that should carriers return to large-scale Red Sea transits, it will expose the imbalance that has built up in the global fleet over the past few years. “While much of the industry has focused on the temporary capacity absorption created by rerouting around Africa, the underlying fundamentals point to something far more persistent: a container fleet that is oversupplied at the top end but increasingly shrinking at the bottom,” Antonella Teodoro, senior consultant at MDS Transmodal, noted in her analysis titled The Post-Red Sea Fleet Paradox: Oversupply at the Top, Shortages at the Bottom. “As diversions unwind and new ships continue to arrive, the industry faces two very different capacity problems — one defined by excess, the other by scarcity,” Teodoro said. <h3>Small ships crucial to regional segment </h3>In 2025, the capacity ordered in the 10,000-to-20,000-TEU bracket was 1.6 million TEUs and the ships greater than 20,000 TEUs comprised 1.3 million TEUs. By contrast, in the less-than-5,000-TEU segment, the 2025 order book was at 442,182 TEUs, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. Teodoro said the sub-5,000-TEU segment was crucial for the intra-regional and feeder networks, but more than 60% of the vessels were at least 25 years old or older, making them prime scrapping candidates. Yet the order book in these size categories was almost non-existent. “By 2030, the global fleet below 2,500 TEUs could contract by 40% to 80%, with the 500-to-999-TEU category almost disappearing entirely,” she said. “This matters because many port systems depend on these vessels in a way that cannot be substituted ... by larger tonnage, regardless of how cheap or abundant it becomes.” <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="5ea90874-1017-4ee9-a80c-de2dfc51d88b"></dynamic-object></div>Alphaliner shipping analyst Mael Pape-Léostic said there are 593 vessels in the sub-5,000-TEU bracket that are 25 years old or older out of 4,473 ships currently trading — 13% of the fleet. In the sub-2,500-TEU segment, 17% of the trading fleet is 25 years old or older. “After a first wave of orders mainly focusing on large ships, we saw carriers this year in particular ordering smaller units with a high interest for specific classes like Bangkokmax [1,700-1,900 TEUs] and Chittagongmax [2,800 TEUs],” Pape-Léostic told the Journal of Commerce. “The ships of smaller segments of the market are aging, but it seems that carriers and non-operating owners are now in the process of rejuvenating this fleet after having focused on mainliners,” he added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The massive injection of larger vessels into the Asia-Europe and Asia-Mediterranean trades over the past two years has pushed smaller vessels into the trans-Atlantic and Latin America corridors, spreading structural overcapacity to secondary lanes. However, despite more than 1.7 million TEUs of new tonnage set to be delivered in 2026, mostly in the 15,000-to-24,000-TEU range, there is a growing mismatch in terms of the size of ships needed, with vessels in the sub-5,000-TEU segment — the backbone of intra-regional and feeder networks — aging rapidly, according to new analysis. A systematic displacement of tonnage from primary to secondary trade lanes over the past two years was driven by extreme outward pressure from the Red Sea diversions, drought in the Panama Canal and the reshuffling of alliances in the first half of 2025, according to Sea-Intelligence Maritime Analysis. “To maintain weekly service frequency while navigating the longer sailing distances on Asia-Europe, carriers were forced to inject significant additional tonnage into Asia-North Europe,” Alan Murphy, CEO of Sea-Intelligence, wrote in this week’s Sunday Spotlight newsletter. The injection of so much capacity triggered a massive downstream effect. As carriers introduced new 24,000-TEU vessels into the extended North Europe services, the existing 14,000-to-20,000-TEU vessels were cascaded directly into the Asia-Mediterranean trade lane. In the trans-Pacific, the capacity management on the Asia-North America West and East coast trades through 2024 was operational in nature as carriers shuffled tonnage between the two trade lanes to mitigate Panama Canal draft restrictions, US port labor disruptions and the after-effects of the pandemic-induced volatility. The net effect was high movement of ships but not much change in capacity. In February of this year, the launch of new alliance structures — Gemini Cooperation, Premier Alliance and Mediterranean Shipping Co. as a standalone venture — provided the catalyst for a massive network shakeup, Sea-Intelligence noted. Carriers broke up established service loops and repositioned vessels globally to fit the new service networks. Volatile demand on Asia-North America West Coast saw a net reduction of 427,432 TEUs in the first half of 2025 as carriers blanked sailings to try to support rates, Murphy noted in the Sunday Spotlight. At the same time, the rapid growth on Asia-Mediterranean subsided, with Murphy surmising that after 18 months of absorbing cascaded tonnage from Asia-North Europe, the trade lane had likely reached a saturation point. In the first half of this year, the net capacity growth into Asia-Mediterranean decelerated by 79% compared with 2024. Steady operational state By the second half of 2025, the new alliance networks had reached a relatively steady operational state with the Mediterranean-North America East Coast trade lane emerging as a key cascading corridor, absorbing 127,686 TEUs in the second half, with most of that capacity from the Asia-Mediterranean trade, the Sunday Spotlight noted. A total of 14 vessels were shifted in the second half, 11 of those of 14,000 to 15,000 TEUs. Asia-East Coast South America (ECSA) was the next biggest net gainer in the second half, absorbing 112,998 TEUs. Most of that was from the two Asia-North America trade lanes that cascaded a combined 283,946 TEUs. A total of 32 vessels were shifted, with 72% of them in the 8,000- to 14,000-TEU segment. But Murphy noted that the nature of the growth in capacity was fundamentally different from the previous year, with 97% of the vessels entering the Asia-East Coast South America trade taking up permanent employment there and not being returned to their previous routes. “This meant that Asia-ECSA became a seemingly preferred destination for mid-size tonnage of 8,000-14,000 TEU vessels that had been cycled out of the main east-west trade lanes,” he said. As the dust settles from the alliance reshuffling of capacity, new analysis from consultancy MDS Transmodal notes that should carriers return to large-scale Red Sea transits, it will expose the imbalance that has built up in the global fleet over the past few years. “While much of the industry has focused on the temporary capacity absorption created by rerouting around Africa, the underlying fundamentals point to something far more persistent: a container fleet that is oversupplied at the top end but increasingly shrinking at the bottom,” Antonella Teodoro, senior consultant at MDS Transmodal, noted in her analysis titled The Post-Red Sea Fleet Paradox: Oversupply at the Top, Shortages at the Bottom. “As diversions unwind and new ships continue to arrive, the industry faces two very different capacity problems — one defined by excess, the other by scarcity,” Teodoro said. Small ships crucial to regional segment In 2025, the capacity ordered in the 10,000-to-20,000-TEU bracket was 1.6 million TEUs and the ships greater than 20,000 TEUs comprised 1.3 million TEUs. By contrast, in the less-than-5,000-TEU segment, the 2025 order book was at 442,182 TEUs, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. Teodoro said the sub-5,000-TEU segment was crucial for the intra-regional and feeder networks, but more than 60% of the vessels were at least 25 years old or older, making them prime scrapping candidates. Yet the order book in these size categories was almost non-existent. “By 2030, the global fleet below 2,500 TEUs could contract by 40% to 80%, with the 500-to-999-TEU category almost disappearing entirely,” she said. “This matters because many port systems depend on these vessels in a way that cannot be substituted ... by larger tonnage, regardless of how cheap or abundant it becomes.” Alphaliner shipping analyst Mael Pape-Léostic said there are 593 vessels in the sub-5,000-TEU bracket that are 25 years old or older out of 4,473 ships currently trading — 13% of the fleet. In the sub-2,500-TEU segment, 17% of the trading fleet is 25 years old or older. “After a first wave of orders mainly focusing on large ships, we saw carriers this year in particular ordering smaller units with a high interest for specific classes like Bangkokmax [1,700-1,900 TEUs] and Chittagongmax [2,800 TEUs],” Pape-Léostic told the Journal of Commerce. “The ships of smaller segments of the market are aging, but it seems that carriers and non-operating owners are now in the process of rejuvenating this fleet after having focused on mainliners,” he added. Contact Greg Knowler at greg.knowler@spglobal.com .

Cascading container tonnage spreads structural overcapacity to secondary lanes

<div class="phx-topic abstract-wrapper">A study commissioned by Freightos finds truckload shippers fail to use 70% of the contracted capacity they negotiate.</div>

A study commissioned by Freightos finds truckload shippers fail to use 70% of the contracted capacity they negotiate.

<div class="phx-topic">Shippers rely too heavily on freight contracts in ocean and truckload procurement events while not utilizing all the space for which they contract, according to research commissioned by online freight marketplace Freightos. The study, conducted this fall by Angi Acocella, a freight lab researcher at MIT’s Center for Transportation and Logistics, found that while most shippers commit at least 90% of their forecast truckload volume to contracts, as much as 70% of that contracted capacity goes unused. The research also found that more than 70% of ocean freight is typically dedicated to contract, but didn’t have a comparable unused capacity metric. Most shippers believe they only “ghost” no more than 25% of their contracted capacity in ocean and truckload, Acocella found, adding that most shippers admit during in-person discussions that they estimate this number. She referred to this phenomenon, where capacity exists but the load doesn’t materialize, as ghost lanes. “There are real costs and performance implications for having ghost lanes,” Acocella said in the study. The research found evidence that truckload shippers are using the spot market in a more strategic way in full truckload. Pre-COVID, about 5% of truckload volume went directly to the spot market. That pertains specifically to loads that didn’t encounter what she called a “routing guide failure,” where a load is rejected by a shipper’s contract carrier and by the backup carriers in its routing guide, but rather was tendered directly to the spot market. That number rose to 10% during the pandemic and stayed at that level post-pandemic. “It looks like there may be a structural shift in how shippers are accessing the spot market,” Acocella said, noting that COVID-19 influenced an increase in spot market loads even to carriers within a shipper’s routing guide. “Despite a soft market [which would normally indicate shippers’ increasing use of contracted capacity], that number has stayed at 10%.” She said a majority of shippers want to move via contract “because it’s predictable and what they can plan for,” even if shippers ought to be using a broader mix of strategic spot capacity alongside long-term, short-term and index-linked contract space. <h3>Strategic use vs. desperation move </h3>Shippers forced from contract onto the truckload spot market are paying 9% to 35% more for freight above their forecast costs, Acocella said, alluding to the use of spot market out of desperation rather than as part of a procurement diversification strategy. The study was based on data from 108 shipper and carrier respondents in ocean trade, and 60 in truckload. “Shippers carry significant wasted costs through unused or underutilized contracts, with analysis showing better efficiency via the strategic use of spot for these lanes,” Judah Levine, Freightos’ head of research, wrote in a Dec. 4 blog about the research. Levine said the findings suggest shippers should measure the ratio and relative performance of contract versus spot freight. He also said shippers should consider index-linked contracts within their broader use of contracts, weigh the use of spot market tools, and automate time-consuming procurement tasks such as requesting tender offers, spot rates and even bookings. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>.</div>

Shippers rely too heavily on freight contracts in ocean and truckload procurement events while not utilizing all the space for which they contract, according to research commissioned by online freight marketplace Freightos. The study, conducted this fall by Angi Acocella, a freight lab researcher at MIT’s Center for Transportation and Logistics, found that while most shippers commit at least 90% of their forecast truckload volume to contracts, as much as 70% of that contracted capacity goes unused. The research also found that more than 70% of ocean freight is typically dedicated to contract, but didn’t have a comparable unused capacity metric. Most shippers believe they only “ghost” no more than 25% of their contracted capacity in ocean and truckload, Acocella found, adding that most shippers admit during in-person discussions that they estimate this number. She referred to this phenomenon, where capacity exists but the load doesn’t materialize, as ghost lanes. “There are real costs and performance implications for having ghost lanes,” Acocella said in the study. The research found evidence that truckload shippers are using the spot market in a more strategic way in full truckload. Pre-COVID, about 5% of truckload volume went directly to the spot market. That pertains specifically to loads that didn’t encounter what she called a “routing guide failure,” where a load is rejected by a shipper’s contract carrier and by the backup carriers in its routing guide, but rather was tendered directly to the spot market. That number rose to 10% during the pandemic and stayed at that level post-pandemic. “It looks like there may be a structural shift in how shippers are accessing the spot market,” Acocella said, noting that COVID-19 influenced an increase in spot market loads even to carriers within a shipper’s routing guide. “Despite a soft market [which would normally indicate shippers’ increasing use of contracted capacity], that number has stayed at 10%.” She said a majority of shippers want to move via contract “because it’s predictable and what they can plan for,” even if shippers ought to be using a broader mix of strategic spot capacity alongside long-term, short-term and index-linked contract space. Strategic use vs. desperation move Shippers forced from contract onto the truckload spot market are paying 9% to 35% more for freight above their forecast costs, Acocella said, alluding to the use of spot market out of desperation rather than as part of a procurement diversification strategy. The study was based on data from 108 shipper and carrier respondents in ocean trade, and 60 in truckload. “Shippers carry significant wasted costs through unused or underutilized contracts, with analysis showing better efficiency via the strategic use of spot for these lanes,” Judah Levine, Freightos’ head of research, wrote in a Dec. 4 blog about the research. Levine said the findings suggest shippers should measure the ratio and relative performance of contract versus spot freight. He also said shippers should consider index-linked contracts within their broader use of contracts, weigh the use of spot market tools, and automate time-consuming procurement tasks such as requesting tender offers, spot rates and even bookings. Contact Eric Johnson at eric.johnson@spglobal.com .

Reliance on contracts results in unused truckload, ocean capacity: study

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If there’s one immutable truth in the world of logistics, it’s this: LTL is an inherently complex form of transportation. Tariffs, rates, DIM weights, transit times — it’s enough to confuse even seasoned logistics professionals. The solution to this knowledge gap has historically been on-the-job training or university supply chain education, but for a variety of reasons there is now a pressing need for third-party, remote LTL training that prepares logistics workers for transportation success. Global Scope Can Overlook Local Intricacies In the past, professionals looking to move into a supply chain career learned about the basics of supply chain from universities. However, many of these college supply chain programs are now global in scope, focusing on worldwide supply chain management instead of the intricacies of specialized domestic transportation. And even these programs, which used to be widespread, are becoming less common. LTL is not an industry of broad-brush strokes; supply chain professionals really need a pointillistic understanding of the logistics of LTL in order to excel in the industry. Accelerating Need for Dedicated LTL Education This lack of specified training put the onus on employers to prepare new hires with the LTL knowledge needed to do their jobs. Dedicated LTL study is a necessity, not a luxury. At the same time, changes in LTL and the broader supply chain world are accelerating. The reliance on e-commerce has ballooned since the start of the pandemic, and last-mile LTL shipments and related e-commerce strains on the supply chain won’t diminish once social distancing abates. That genie isn’t going back into the bottle. So supply chain employers need logistics workers that are fully versed in all aspects of the industry, ready to solve unique shipping and delivery problems based on their extensive supply chain knowledge But why care about LTL? It’s been reported that some shippers in today’s world are no longer concerned with what mode is used to ship their goods. A Multimodal Approach Ensures On-Time Delivery This mode agnosticism means supply chain stakeholders have to be well versed in all modes of transportation. As unforeseen weather events and other disruptions, such as protests, become more common, savvy logistics employees will need to be armed with familiarity of all modes, not just the most popular, to ensure that freight is delivered on time, without damage, and in the most financially expedient way possible. Offerings like SMC³’s LTL online education courses cover a wide range of topics from LTL basics and operations to more advanced concepts like pricing analytics and transportation law. The company also has plans to continually refresh content, adding new expert presenters and taking the feedback of students to make the courses even better as time goes on. Learn more about&nbsp;<a href="https://logisticstrainingcenter.com/smc3-courses/" rel="noreferrer" class="joc_admin__link">SMC³’s LTL Online Education program</a>&nbsp;and view the 2021 hybrid schedule, featuring live industry experts,&nbsp;<a href="https://www.smc3.com/onlinelearning2021/" rel="noreferrer" class="joc_admin__link">here.</a>

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Filling the Supply Chain Education Gap with LTL Education Courses

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