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<div class="phx-topic abstract-wrapper">With spot and contract rates moving in opposite directions, trucking providers tell TPM 2019 it’s difficult to predict exactly where the market is headed in 2019.</div>

With spot and contract rates moving in opposite directions, trucking providers tell TPM 2019 it’s difficult to predict exactly where the market is headed in 2019.

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<div>LONG BEACH, California -- Last year was great for trucking companies and less so for the shippers that rely on those operators to move their freight, but capacity is beginning to loosen as <a>more trucks come online</a> and shippers have come to accept higher rates as part of the cost of doing business, bringing the market closer to what could be considered balanced. Even so, no one knows exactly what this new normal will look like.Or as one executive put it, the US trucking market is in the midst of what he calls "the muddy middle."Spot market truckload rates have...

LONG BEACH, California -- Last year was great for trucking companies and less so for the shippers that rely on those operators to move their freight, but capacity is beginning to loosen as more trucks come online and shippers have come to accept higher rates as part of the cost of doing business, bringing the market closer to what could be considered balanced. Even so, no one knows exactly what this new normal will look like. Or as one executive put it, the US trucking market is in the midst of what he calls "the muddy middle." Spot market truckload rates have dropped between 10 and 12 percent from this time last year, but contract rates are up about 5 percent on top of a 14 percent climb in 2018, according to a JOC.com analysis of data from DAT Solutions and Truckstop.com. Shippers that exited the spot market a year ago, desperate to find relief in contract carriage, are now returning to the spot market. Click to enlarge “There is that plethora of available capacity right now. As a whole, the [spot] market is pretty loose,” Matt Pyatt, CEO of Arrive Logistics, said at the JOC’s TPM 2019 conference in Long Beach, California. It’s possible beneficial cargo owners (BCOs) reacted to the spot market spike from mid-2017 to mid-2018 by shifting so much freight back under contract that the pendulum swung too much, putting upward pressure on rates. Truckload carriers and third-party logistics providers have used terms such as “balanced” and “equilibrium” to describe the state of the market heading into 2019, but that’s not entirely accurate either. One thing that is certain, however, is that it’s not as strong of a seller’s market as it was in 2018. Finding the bottom With contract and spot rates currently headed in different directions, it’s unclear exactly how this will all play out. IHS Markit chief economist Nariman Behravesh put the odds of a recession in 2019 at around 30 percent, but upped that chance to 50-50 for 2020 . A recession would mean lower cargo volumes, which would drive down both contract and spot rates, creating a buyer’s market. “If I had to give it a name, I’d call it the ‘muddy middle,’” said Brian Reed, vice president of global supply chain optimization at Geodis. “The market is at a teeter point. It can go either way, [and] it can go there fast or slow.” Some shippers are waiting out the market, extending their bid cycles for longer than normal before awarding a given lane or volume in order to better gauge market conditions. “A lot of shippers who started the process in the third or fourth quarter, they saw the rates [moving] in the right direction for them, so they actually held out on releasing the awards until mid-January or even into February,” said Mark Ford, chief operating officer with BlueGrace Logistics. “Shippers are trying to figure out where that bottom is, throwing out their routing guides, and going to the spot market depending on the cost differential.” In an industry in which every minute matters and every second has a dollar amount attached to it, shippers can drive those rates up or down simply based how they value time. “Shippers should look at how they can get from a two- or three-hour load time to a 30-minute load time or 45-minute load time, and what that would do to increase capacity in trucking,” Pyatt said. “We don’t have a driver shortage problem; we have a utilization problem.” In this “muddy middle,” with no clear picture of which direction rates will go in the next nine months, shippers that keep drivers moving, thereby increasing productivity, could avoid the tap dance of changing carriers every time the winds shift by driving down rates for good. Contact Ari Ashe at ari.ashe@ihsmarkit.com and follow him on Twitter: @arijashe .

Trucking News

US trucking market stuck in the ‘muddy middle’

<div class="phx-topic abstract-wrapper">As if the Strait of Hormuz and Red Sea haven’t caused enough concern for commercial shipping, Lars Jensen warns of the potential for weather-related disruptions once again at the canal by year-end. </div>

As if the Strait of Hormuz and Red Sea haven’t caused enough concern for commercial shipping, Lars Jensen warns of the potential for weather-related disruptions once again at the canal by year-end.

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<div class="phx-topic">The entire shipping industry, and most certainly shippers needing to get cargo moved, is yearning for some semblance of stability and predictability to return. If this is the message you are seeking, you should not read further. While all eyes are on the Strait of Hormuz as well as the Red Sea crisis and their inevitable domino effects, it is prudent to look deeper into another potential issue: the Panama Canal. No, not from the geopolitical perspective where Panama is presently squeezed between US and Chinese interests. That is an uncertainty unto itself. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6202588_0.1.jpg"></img></div>The US National Oceanic and Atmospheric Administration (NOAA) issues a monthly outlook for the El Niño/La Niña weather phenomenon. These are shifting weather patterns occurring in the Pacific, and among the many effects driven by the weather pattern is an impact on rainfall in Panama. When we have the El Niño pattern, this can lead to reduced rainfall in Panama, which in turn impacts the water level in Lake Gatun in central Panama. This is the water basin used to operate the locks in the Panama Canal. If the water level drops too far, it leads to restrictions on vessels being able to transit the Panama Canal. The water level in Lake Gatun generally varies between 85 to 88 feet. The latest El Niño was 2023-24, and it was categorized as “strong.” This led to Lake Gatun water levels dropping to 79.2 feet, which was the third-lowest recorded since 1965 when measurements began. As many might remember from two years ago, this resulted in significant capacity restrictions on shipping through the Panama Canal. We saw a “weak” El Niño in 2018-2020. (Note that the “weak,” “strong,” etc. is the official designation placed on each El Niño by NOAA depending on intensity). Here we also saw Lake Gatun drop below 80 feet, although for a considerably shorter period than in 2023-24. The one before that was a “very strong” El Niño in 2015-2016 which had water levels drop almost to 78 feet, the lowest level ever recorded. There were five “weak” or “moderate” El Niño periods from 1999-2015, all with limited impact on the canal water level. Prior to that, 1997-1998 was a “very strong” El Niño, leading to water levels dropping to 78.5 feet, the second-lowest ever recorded. The historical data is quite clear. A “strong” or “very strong” El Niño tends to result in a significant decline in Lake Gatun water levels. A weaker El Niño might at times do that, but usually not. <h3>Shippers should begin planning </h3>On Thursday, the outlook from NOAA noted a 61% chance of El Niño emerging this May-July and persisting at least until the end of 2026. NOAA also predicted a 51% chance by end-year that it will be either “strong” or “very strong,” with equal risk between the two. This means that based on the current weather models, there is essentially a 50/50 risk that by the end of the year we will have an El Niño pattern of a magnitude which historically has a high likelihood of significantly reducing the water levels in Lake Gatun. And with this comes the risk of renewed, albeit temporary, capacity restrictions through the canal. Weather and climate forecasts are, by nature, probabilistic, and no one can give a certain prediction. Instead, shippers depending on cargo flows through the Panama Canal might at this time contemplate whether this 50/50 risk should be ignored, be used as a reason for planning contingency measures or be used to look at possible changes to the current supply chain setup. Lars Jensen is CEO and partner at Vespucci Maritime. Contact him at <a href="mailto:lars.jensen@vespucci-maritime.com">lars.jensen@vespucci-maritime.com</a>. </div>

The entire shipping industry, and most certainly shippers needing to get cargo moved, is yearning for some semblance of stability and predictability to return. If this is the message you are seeking, you should not read further. While all eyes are on the Strait of Hormuz as well as the Red Sea crisis and their inevitable domino effects, it is prudent to look deeper into another potential issue: the Panama Canal. No, not from the geopolitical perspective where Panama is presently squeezed between US and Chinese interests. That is an uncertainty unto itself. The US National Oceanic and Atmospheric Administration (NOAA) issues a monthly outlook for the El Niño/La Niña weather phenomenon. These are shifting weather patterns occurring in the Pacific, and among the many effects driven by the weather pattern is an impact on rainfall in Panama. When we have the El Niño pattern, this can lead to reduced rainfall in Panama, which in turn impacts the water level in Lake Gatun in central Panama. This is the water basin used to operate the locks in the Panama Canal. If the water level drops too far, it leads to restrictions on vessels being able to transit the Panama Canal. The water level in Lake Gatun generally varies between 85 to 88 feet. The latest El Niño was 2023-24, and it was categorized as “strong.” This led to Lake Gatun water levels dropping to 79.2 feet, which was the third-lowest recorded since 1965 when measurements began. As many might remember from two years ago, this resulted in significant capacity restrictions on shipping through the Panama Canal. We saw a “weak” El Niño in 2018-2020. (Note that the “weak,” “strong,” etc. is the official designation placed on each El Niño by NOAA depending on intensity). Here we also saw Lake Gatun drop below 80 feet, although for a considerably shorter period than in 2023-24. The one before that was a “very strong” El Niño in 2015-2016 which had water levels drop almost to 78 feet, the lowest level ever recorded. There were five “weak” or “moderate” El Niño periods from 1999-2015, all with limited impact on the canal water level. Prior to that, 1997-1998 was a “very strong” El Niño, leading to water levels dropping to 78.5 feet, the second-lowest ever recorded. The historical data is quite clear. A “strong” or “very strong” El Niño tends to result in a significant decline in Lake Gatun water levels. A weaker El Niño might at times do that, but usually not. Shippers should begin planning On Thursday, the outlook from NOAA noted a 61% chance of El Niño emerging this May-July and persisting at least until the end of 2026. NOAA also predicted a 51% chance by end-year that it will be either “strong” or “very strong,” with equal risk between the two. This means that based on the current weather models, there is essentially a 50/50 risk that by the end of the year we will have an El Niño pattern of a magnitude which historically has a high likelihood of significantly reducing the water levels in Lake Gatun. And with this comes the risk of renewed, albeit temporary, capacity restrictions through the canal. Weather and climate forecasts are, by nature, probabilistic, and no one can give a certain prediction. Instead, shippers depending on cargo flows through the Panama Canal might at this time contemplate whether this 50/50 risk should be ignored, be used as a reason for planning contingency measures or be used to look at possible changes to the current supply chain setup. Lars Jensen is CEO and partner at Vespucci Maritime. Contact him at lars.jensen@vespucci-maritime.com .

El Niño forecast suggests risk of low water levels along Panama Canal

<div class="phx-topic abstract-wrapper">The start to the year was largely unaffected by the Middle East conflict, but the lagging effect of high bunker fuel prices will be felt from the second quarter onward. </div>

The start to the year was largely unaffected by the Middle East conflict, but the lagging effect of high bunker fuel prices will be felt from the second quarter onward.

<div class="phx-topic">OOCL recorded a 7.6% year-over-year drop in first-quarter revenue amid lower demand on most trades and softening rates. The Cosco subsidiary booked revenue of $2.13 billion in the first three months, with topline sales down across all four main trade lanes as capacity increased 4.3%. The carrier’s total volume rose 1.7% to just under 2 million TEUs, while the overall load factor was 2.1% lower than during the same period in 2025. Trans-Pacific liner revenue at OOCL fell 17% year over year to $744 million, Asia-Europe revenue was down 4.5% at $482 million, trans-Atlantic revenue fell 4.3% to $163 million, and intra-Asia/Australasia revenue slipped 0.7% to $748 million. The slight increase in first-quarter volume was thanks to the Asia-Europe corridor, the only trade lane to record growth in the quarter. The carrier handled 384,893 TEUs on Asia-Europe, up 12% year over year. Trans-Pacific volume fell 6% to 523,385 TEUs, trans-Atlantic volume was down 1.3% at 133,910 TEUs, and intra-Asia/Australasia volume declined 3% to 954,464 TEUs. <h3>Lagging impact of high bunker fuel price </h3>While the oversupplied container shipping business appears to be heading for a weak first quarter largely unaffected by disruption from the Middle East war, the industry bill for a sharp increase in bunker prices will be due from the second quarter onward, according to investment bank J.P. Morgan. “The Persian Gulf disruption remains a highly fluid situation and given the time lag in loaded rates, bunker adjustment factors for contracts, and Maersk’s two-month bunker fuel inventory, we see the impact skewed to Q2 2026 onwards,” the bank wrote in a note to Maersk investors Friday. J.P. Morgan is expecting Maersk’s first-quarter earnings out May 7 will also reflect a muted first quarter, given the decline in freight rates through the end of February and the effects of Persian Gulf disruption not really impacting the first quarter. But the investment bank highlighted the impact of high bunker fuel prices that carriers are trying to recover through bunker adjustment factors (BAFs) and emergency fuel surcharges. “We have factored into our 2026 estimates [for Maersk] our assumption that these disruptions will last at least six months, with bunker fuel cost increases post Q2 the biggest drag on earnings that will need to be recovered through firmer spot rates and BAF compliance,” J.P. Morgan said. The bank expects the 2026 bunker fuel bill for Maersk to increase by $1.2 billion to a full-year cost of $7.3 billion on the back of an average price of $693 per ton versus $539 in 2025. “Maersk reportedly has two months of bunker fuel inventory, which shields it from the current volatility,” the bank said. “The bunker fuel adjustment factor for contracts will be recovered in Q3, and therefore there is a lagged fuel cost recovery.” Reflecting this dynamic, J.P. Morgan has forecast that Maersk will report an earnings before interest and taxes loss of $2.6 billion for the year, up from a previous expectation of a $2.8 billion loss. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

OOCL recorded a 7.6% year-over-year drop in first-quarter revenue amid lower demand on most trades and softening rates. The Cosco subsidiary booked revenue of $2.13 billion in the first three months, with topline sales down across all four main trade lanes as capacity increased 4.3%. The carrier’s total volume rose 1.7% to just under 2 million TEUs, while the overall load factor was 2.1% lower than during the same period in 2025. Trans-Pacific liner revenue at OOCL fell 17% year over year to $744 million, Asia-Europe revenue was down 4.5% at $482 million, trans-Atlantic revenue fell 4.3% to $163 million, and intra-Asia/Australasia revenue slipped 0.7% to $748 million. The slight increase in first-quarter volume was thanks to the Asia-Europe corridor, the only trade lane to record growth in the quarter. The carrier handled 384,893 TEUs on Asia-Europe, up 12% year over year. Trans-Pacific volume fell 6% to 523,385 TEUs, trans-Atlantic volume was down 1.3% at 133,910 TEUs, and intra-Asia/Australasia volume declined 3% to 954,464 TEUs. Lagging impact of high bunker fuel price While the oversupplied container shipping business appears to be heading for a weak first quarter largely unaffected by disruption from the Middle East war, the industry bill for a sharp increase in bunker prices will be due from the second quarter onward, according to investment bank J.P. Morgan. “The Persian Gulf disruption remains a highly fluid situation and given the time lag in loaded rates, bunker adjustment factors for contracts, and Maersk’s two-month bunker fuel inventory, we see the impact skewed to Q2 2026 onwards,” the bank wrote in a note to Maersk investors Friday. J.P. Morgan is expecting Maersk’s first-quarter earnings out May 7 will also reflect a muted first quarter, given the decline in freight rates through the end of February and the effects of Persian Gulf disruption not really impacting the first quarter. But the investment bank highlighted the impact of high bunker fuel prices that carriers are trying to recover through bunker adjustment factors (BAFs) and emergency fuel surcharges. “We have factored into our 2026 estimates [for Maersk] our assumption that these disruptions will last at least six months, with bunker fuel cost increases post Q2 the biggest drag on earnings that will need to be recovered through firmer spot rates and BAF compliance,” J.P. Morgan said. The bank expects the 2026 bunker fuel bill for Maersk to increase by $1.2 billion to a full-year cost of $7.3 billion on the back of an average price of $693 per ton versus $539 in 2025. “Maersk reportedly has two months of bunker fuel inventory, which shields it from the current volatility,” the bank said. “The bunker fuel adjustment factor for contracts will be recovered in Q3, and therefore there is a lagged fuel cost recovery.” Reflecting this dynamic, J.P. Morgan has forecast that Maersk will report an earnings before interest and taxes loss of $2.6 billion for the year, up from a previous expectation of a $2.8 billion loss. Contact Greg Knowler at greg.knowler@spglobal.com .

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OOCL posts revenue decline in muted first quarter

<div class="phx-topic abstract-wrapper">An increasing number of lawmakers at the federal, state, and municipal levels are taking steps to freeze data center development, which serves as an important cargo source. </div>

An increasing number of lawmakers at the federal, state, and municipal levels are taking steps to freeze data center development, which serves as an important cargo source.

<div class="phx-topic">Growing calls to place moratoriums on data center construction across the US present a concern for project cargo specialists who are counting on power generation shipments and other key cargoes required to meet the enormous demands of the mega projects. An increasing number of lawmakers at the federal, state and municipal levels are taking steps to freeze data center development, which serves as an important cargo source. Opponents say the centers drain power supplies, raise energy costs, and can harm the environment. Beyond the physical construction of data centers — the largest of which exceed 4 million square feet in the US and can consume as much energy and water as a small town — the development of these facilities is driving large volumes of cargo for infrastructure projects to support their massive utility needs. Data center construction is already facing setbacks related to tariffs and equipment scarcity. According to an April 1 report by Bloomberg, nearly half of data centers planned for this year in the US are expected to experience delays or cancellations because of a shortage of electrical equipment including transformers, switchgear and batteries to build out the power infrastructure for the centers. The parts primarily come from China, subjecting them to heavy tariffs and taking 24 to 30 months to arrive — up to a year later than data center developers say they need the equipment. For project logistics providers, delays from moratoriums can create significant setbacks for cargo shipments. “Long-lead equipment may already be manufactured or in transit, requiring additional storage, rerouting or resequencing of deliveries,” John Lu, global sector head for semiconductor and cloud construction with DHL Global Forwarding Industrial Projects, told the Journal of Commerce. For large artificial intelligence and data center developments, planning around power, water and sustainability often starts well before projects are publicly announced, Lu said. “Projects of this scale are complex and typically involve multiple layers of local, state and federal approvals,” he said. <h3>Maine set to impose first statewide ban </h3>Legislative efforts to rein in data centers are playing out on all levels of government — some with more support than others. In March, Sen. Bernie Sanders (I-Vermont) and Rep. Alexandria Ocasio-Cortez (D-New York) introduced legislation in the Senate and House, respectively, that they said would enact a “reasonable pause” on the development of new AI data centers in the US “to ensure the safety of humanity.” If the bill becomes law, it would institute “an immediate federal moratorium on AI data centers until strong national safeguards are put in place” to ensure AI is safe and effective, does not increase electricity or utility prices, or harm communities or damage the environment. Although the legislation is unlikely to advance, its introduction follows efforts by more than a dozen states and several cities and counties pushing forward with moratorium proposals. Maine is set to become the first US state to temporarily outlaw the development of most new data centers after a proposed ban received state House approval April 6. The bill advances to the state Senate, which is expected to pass the legislation. The moratorium would freeze construction of any data center consuming at least 20 megawatts of electricity until Nov. 1, 2027. Lawmakers have proposed data center bans or restrictions in 12 other states: Georgia, Maryland, Michigan, Minnesota, New Hampshire, New York, Oklahoma, Pennsylvania, South Carolina, Vermont, and Virginia. On the municipal level, the city of New Orleans in January passed a one-year moratorium on the construction of data centers, and city council members — who unanimously approved the measure — say the ban will likely become permanent. Cities in North Carolina and Wisconsin also approved temporary bans earlier this year, while Dallas and Denver are considering their own restrictions. Global spending on data centers is projected to reach $7 trillion by 2030, according to consultant McKinsey. Of the 4,088 data centers now in the US, Virginia and Texas are the top two states for data center construction, with 579 and 411 facilities, respectively, according to industry website Data Center Map. DHL is in the process of expanding its North American infrastructure to support data center logistics, adding 10 warehouse sites with over 7 million square feet of capacity. The facilities are set go live sometime in 2026, according to DHL. Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>. </div>

Growing calls to place moratoriums on data center construction across the US present a concern for project cargo specialists who are counting on power generation shipments and other key cargoes required to meet the enormous demands of the mega projects. An increasing number of lawmakers at the federal, state and municipal levels are taking steps to freeze data center development, which serves as an important cargo source. Opponents say the centers drain power supplies, raise energy costs, and can harm the environment. Beyond the physical construction of data centers — the largest of which exceed 4 million square feet in the US and can consume as much energy and water as a small town — the development of these facilities is driving large volumes of cargo for infrastructure projects to support their massive utility needs. Data center construction is already facing setbacks related to tariffs and equipment scarcity. According to an April 1 report by Bloomberg, nearly half of data centers planned for this year in the US are expected to experience delays or cancellations because of a shortage of electrical equipment including transformers, switchgear and batteries to build out the power infrastructure for the centers. The parts primarily come from China, subjecting them to heavy tariffs and taking 24 to 30 months to arrive — up to a year later than data center developers say they need the equipment. For project logistics providers, delays from moratoriums can create significant setbacks for cargo shipments. “Long-lead equipment may already be manufactured or in transit, requiring additional storage, rerouting or resequencing of deliveries,” John Lu, global sector head for semiconductor and cloud construction with DHL Global Forwarding Industrial Projects, told the Journal of Commerce. For large artificial intelligence and data center developments, planning around power, water and sustainability often starts well before projects are publicly announced, Lu said. “Projects of this scale are complex and typically involve multiple layers of local, state and federal approvals,” he said. Maine set to impose first statewide ban Legislative efforts to rein in data centers are playing out on all levels of government — some with more support than others. In March, Sen. Bernie Sanders (I-Vermont) and Rep. Alexandria Ocasio-Cortez (D-New York) introduced legislation in the Senate and House, respectively, that they said would enact a “reasonable pause” on the development of new AI data centers in the US “to ensure the safety of humanity.” If the bill becomes law, it would institute “an immediate federal moratorium on AI data centers until strong national safeguards are put in place” to ensure AI is safe and effective, does not increase electricity or utility prices, or harm communities or damage the environment. Although the legislation is unlikely to advance, its introduction follows efforts by more than a dozen states and several cities and counties pushing forward with moratorium proposals. Maine is set to become the first US state to temporarily outlaw the development of most new data centers after a proposed ban received state House approval April 6. The bill advances to the state Senate, which is expected to pass the legislation. The moratorium would freeze construction of any data center consuming at least 20 megawatts of electricity until Nov. 1, 2027. Lawmakers have proposed data center bans or restrictions in 12 other states: Georgia, Maryland, Michigan, Minnesota, New Hampshire, New York, Oklahoma, Pennsylvania, South Carolina, Vermont, and Virginia. On the municipal level, the city of New Orleans in January passed a one-year moratorium on the construction of data centers, and city council members — who unanimously approved the measure — say the ban will likely become permanent. Cities in North Carolina and Wisconsin also approved temporary bans earlier this year, while Dallas and Denver are considering their own restrictions. Global spending on data centers is projected to reach $7 trillion by 2030, according to consultant McKinsey. Of the 4,088 data centers now in the US, Virginia and Texas are the top two states for data center construction, with 579 and 411 facilities, respectively, according to industry website Data Center Map. DHL is in the process of expanding its North American infrastructure to support data center logistics, adding 10 warehouse sites with over 7 million square feet of capacity. The facilities are set go live sometime in 2026, according to DHL. Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Push for data center bans in US threatens project cargo surge

<div class="phx-topic abstract-wrapper">Most of the increases represent a significant premium on current pricing levels, but it remains to be seen how sticky the aspirational rates will be with cargo markets also under pressure from high energy prices. </div>

Most of the increases represent a significant premium on current pricing levels, but it remains to be seen how sticky the aspirational rates will be with cargo markets also under pressure from high energy prices.

<div class="phx-topic">Ocean carriers have unveiled a raft of rate increases and emergency fuel surcharges on multiple trade lanes as high bunker prices push up operating costs across shipping networks. Most of the increases represent a significant premium on current pricing levels, but it remains to be seen how sticky the aspirational rates will be with cargo markets also under pressure from high energy prices. Carriers have been pushing general rate increases (GRIs) on Asia-US trade lanes to lift prices on the trans-Pacific. As of April 9, Asia-US East Coast rates of $3,525/FEU were up 20% compared with levels before the April 1 GRIs, with Asia-West Coast up 24% at $2,525/FEU, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. Mediterranean Shipping Co. will increase its Asia-North America emergency fuel surcharge (EFS) on May 1, with the Asia-North America West Coast EFS rising 70% to $467/FEU and the East Coast levy up 50% at $644/FEU. On Asia-North Europe, rates eased this week despite Maersk announcing freight-all-kinds (FAK) prices that set higher rate levels ranging from $3,500 to $3,900/FEU depending on destination ports. Data from rate benchmarking platform Xeneta shows Asia-North Europe rates unchanged this week near $2,854/FEU. Other upcoming increases announced this week include CMA CGM planning an April 16 FAK rate of $4,300/FEU from Northwest India and Pakistan to North Europe, the Mediterranean and North Africa, more than 70% higher than the current rate, while Hapag-Lloyd will be adding $1,000/FEU on the Indian Subcontinent, Pakistan and Middle East to the US and Canada. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="d915cdd3-263b-4835-b993-5efb9468dc03"></dynamic-object></div>Hapag-Lloyd’s EFS of $160/TEU, in effect since mid-March on routes not regulated by the US Federal Maritime Commission (FMC), was implemented on US trades this week. The FMC requires <a href="https://www.joc.com/article/fmc-rejects-requests-by-carriers-to-waive-waiting-period-for-middle-east-surcharges-6191881">a 30-day notice period from carriers</a> before they can implement rate increases and surcharges on US routes. Ocean Network Express on April 2 implemented an inland fuel surcharge for carrier haulage in Latin America and across all non-FMC regulated trade routes and services and will extend that to FMC-regulated routes on May 2. “The evolving security situation in the Middle East continues to pose significant challenges, affecting logistics operations and customer supply chains,” ONE said in its surcharge announcement this week. “Many refineries are also operating at reduced capacity, limiting export volumes and causing substantial disruptions in global fuel supply chains,” the carrier added. <h3>Shipping reluctant to pass through Hormuz </h3>The Strait of Hormuz that links the Persian Gulf with the Gulf of Oman is a key energy transport route with about 20% of the world’s oil and gas supplies passing through the waterway. It has been effectively closed since the war started on Feb. 28, and despite <a href="https://www.joc.com/article/ocean-carriers-wait-for-clarity-on-safe-hormuz-passage-after-us-iran-ceasefire-6201132">the two-week US-Iran ceasefire agreed to earlier this week</a>, shipping remains reluctant to pass through the strait until safety can be guaranteed. Jan Christensen, senior director of fuel purchasing at Hapag-Lloyd, highlighted the impact high prices and supply disruptions from the Hormuz blockade were having on bunkering operations. “Higher crude oil prices directly translate into higher bunker prices, which are the fuel costs for our vessels,” Christensen said in a recent interview. “Fuel is one of the largest cost components in container shipping, so these developments have a significant financial impact for all carriers. When oil prices move sharply upward, bunker costs follow very quickly, which increases operational expenses across the entire fleet.” <a href="https://www.joc.com/article/singapore-bunker-supply-continues-to-run-down-as-middle-east-war-drags-on-6198359">Fuel availability continues to tighten</a>, particularly in the Asian bunkering hubs in Singapore and South Korea. “Some suppliers are already signaling that they cannot fully guarantee contracted volumes, and it’s becoming increasingly difficult to secure bunker contracts for April and May,” Christensen said. <h3>Lingering Europe port congestion </h3>On top of the rising fuel costs, carriers are also facing delays when calling at gateway ports in North Europe and the Mediterranean. Yard density is high, with the lingering effects of severe storms in early March continuing to be felt. Kuehne + Nagel’s visibility tool SeaExplorer noted “heavily disrupted operations” at Antwerp, Hamburg and Felixstowe, with seven-day average vessel wait times of more than two days. “It’s been reported that yard density has reached over 75% at ports like Antwerp, Hamburg, and Rotterdam in the past few weeks and much of that was due to the berthing delays from storms in February and early March and their lingering impacts,” said Destine Ozuygur, senior market analyst at Xeneta. Another challenge for shippers on the Asia-North Europe trade lane is on-time performance. While schedule reliability in March of 32% into Northern Europe was a significant improvement on the 18% in February and 22% in January, Ozuygur noted it was barely above the average 29% on-time performance through 2025. “Any gains we’ve seen on this trade have been short-lived over the past 12 months,” she said, adding that only in March and May of last year did schedule reliability ever pass 40%. From a deployed capacity perspective, the Asia-Mediterranean trade lane has seen an 8% increase from April to May, with carriers adding 69,000 TEUs to the corridor to serve rerouted Persian Gulf cargo, Xeneta data shows. Planned capacity on Asia-Mediterranean routes of 844,862 TEUs in April is an increase of 25% compared with March and will jump to 913,285 TEUs in May. “The Far East-Med is being used to route Gulf Cooperation Council-bound cargo through Jeddah, King Abdullah and Mersin,” Ozuygur said. “The challenges that could potentially bring to other Mediterranean ports if this becomes a long-term routing option that gains favor over Khor Fakkan, Mundra, Nhava Sheva, etc. is one worth noting.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean carriers have unveiled a raft of rate increases and emergency fuel surcharges on multiple trade lanes as high bunker prices push up operating costs across shipping networks. Most of the increases represent a significant premium on current pricing levels, but it remains to be seen how sticky the aspirational rates will be with cargo markets also under pressure from high energy prices. Carriers have been pushing general rate increases (GRIs) on Asia-US trade lanes to lift prices on the trans-Pacific. As of April 9, Asia-US East Coast rates of $3,525/FEU were up 20% compared with levels before the April 1 GRIs, with Asia-West Coast up 24% at $2,525/FEU, according to Platts, a sister company of the Journal of Commerce within S&P Global. Mediterranean Shipping Co. will increase its Asia-North America emergency fuel surcharge (EFS) on May 1, with the Asia-North America West Coast EFS rising 70% to $467/FEU and the East Coast levy up 50% at $644/FEU. On Asia-North Europe, rates eased this week despite Maersk announcing freight-all-kinds (FAK) prices that set higher rate levels ranging from $3,500 to $3,900/FEU depending on destination ports. Data from rate benchmarking platform Xeneta shows Asia-North Europe rates unchanged this week near $2,854/FEU. Other upcoming increases announced this week include CMA CGM planning an April 16 FAK rate of $4,300/FEU from Northwest India and Pakistan to North Europe, the Mediterranean and North Africa, more than 70% higher than the current rate, while Hapag-Lloyd will be adding $1,000/FEU on the Indian Subcontinent, Pakistan and Middle East to the US and Canada. Hapag-Lloyd’s EFS of $160/TEU, in effect since mid-March on routes not regulated by the US Federal Maritime Commission (FMC), was implemented on US trades this week. The FMC requires a 30-day notice period from carriers before they can implement rate increases and surcharges on US routes. Ocean Network Express on April 2 implemented an inland fuel surcharge for carrier haulage in Latin America and across all non-FMC regulated trade routes and services and will extend that to FMC-regulated routes on May 2. “The evolving security situation in the Middle East continues to pose significant challenges, affecting logistics operations and customer supply chains,” ONE said in its surcharge announcement this week. “Many refineries are also operating at reduced capacity, limiting export volumes and causing substantial disruptions in global fuel supply chains,” the carrier added. Shipping reluctant to pass through Hormuz The Strait of Hormuz that links the Persian Gulf with the Gulf of Oman is a key energy transport route with about 20% of the world’s oil and gas supplies passing through the waterway. It has been effectively closed since the war started on Feb. 28, and despite the two-week US-Iran ceasefire agreed to earlier this week , shipping remains reluctant to pass through the strait until safety can be guaranteed. Jan Christensen, senior director of fuel purchasing at Hapag-Lloyd, highlighted the impact high prices and supply disruptions from the Hormuz blockade were having on bunkering operations. “Higher crude oil prices directly translate into higher bunker prices, which are the fuel costs for our vessels,” Christensen said in a recent interview. “Fuel is one of the largest cost components in container shipping, so these developments have a significant financial impact for all carriers. When oil prices move sharply upward, bunker costs follow very quickly, which increases operational expenses across the entire fleet.” Fuel availability continues to tighten , particularly in the Asian bunkering hubs in Singapore and South Korea. “Some suppliers are already signaling that they cannot fully guarantee contracted volumes, and it’s becoming increasingly difficult to secure bunker contracts for April and May,” Christensen said. Lingering Europe port congestion On top of the rising fuel costs, carriers are also facing delays when calling at gateway ports in North Europe and the Mediterranean. Yard density is high, with the lingering effects of severe storms in early March continuing to be felt. Kuehne + Nagel’s visibility tool SeaExplorer noted “heavily disrupted operations” at Antwerp, Hamburg and Felixstowe, with seven-day average vessel wait times of more than two days. “It’s been reported that yard density has reached over 75% at ports like Antwerp, Hamburg, and Rotterdam in the past few weeks and much of that was due to the berthing delays from storms in February and early March and their lingering impacts,” said Destine Ozuygur, senior market analyst at Xeneta. Another challenge for shippers on the Asia-North Europe trade lane is on-time performance. While schedule reliability in March of 32% into Northern Europe was a significant improvement on the 18% in February and 22% in January, Ozuygur noted it was barely above the average 29% on-time performance through 2025. “Any gains we’ve seen on this trade have been short-lived over the past 12 months,” she said, adding that only in March and May of last year did schedule reliability ever pass 40%. From a deployed capacity perspective, the Asia-Mediterranean trade lane has seen an 8% increase from April to May, with carriers adding 69,000 TEUs to the corridor to serve rerouted Persian Gulf cargo, Xeneta data shows. Planned capacity on Asia-Mediterranean routes of 844,862 TEUs in April is an increase of 25% compared with March and will jump to 913,285 TEUs in May. “The Far East-Med is being used to route Gulf Cooperation Council-bound cargo through Jeddah, King Abdullah and Mersin,” Ozuygur said. “The challenges that could potentially bring to other Mediterranean ports if this becomes a long-term routing option that gains favor over Khor Fakkan, Mundra, Nhava Sheva, etc. is one worth noting.” Contact Greg Knowler at greg.knowler@spglobal.com .

Cost-hit ocean carriers roll out series of rate increases, fuel surcharges

<div class="phx-topic abstract-wrapper">Rising fuel prices and memory costs may force buyers to re-think, or at least delay, purchases of pricey electronics this year. </div>

Rising fuel prices and memory costs may force buyers to re-think, or at least delay, purchases of pricey electronics this year.

<div class="phx-topic">(The following story appears in the Top 100 Importers and Exporters issue of the Journal of Commerce magazine to be published May 4, 2026.) Importers of consumer electronics affected by rising costs on US households in 2025 are facing dual threats to growth prospects in the year ahead: the impact of increased fuel costs on consumer discretionary spending and the skyrocketing price of memory due to demand from data center construction. That means there might be little respite for consumer electronics manufacturers and retailers after they saw containerized imports of those products dip 2.2% in 2025, according to data from PIERS, a sister product of the Journal of Commerce within S&amp;P Global. “Energy prices and gas prices, that’s going to be a headline budgetary impact on the average household,” Paul Gagnon, vice president of consumer technology at market research firm Circana, told the Journal of Commerce. “We were already expecting consumer demand to not be great this year and that tariffs would have an impact. But food and other necessary purchases will delay demand for discretionary purchases.” A potentially bigger headwind for consumer electronics sales is the impact of memory prices. Gagnon said pricing for memory is up 400% year over year in the last few months. “Data centers use huge amounts of high bandwidth memory and the generators of that memory don’t have bandwidth to supply data centers and lower value memory that goes into consumer products,” he said. The impact of that dynamic won’t be isolated to the types of products most associated with memory, like laptops and tablets, but will be more widespread since virtually every consumer electronic good now has a memory component. “Any product that uses a lot of memory will be susceptible,” Gagnon said. “Even things that use memory indirectly, prices will go up.” Sony, during its fiscal third-quarter earnings call in February, noted the memory cost issue. “We are already in a position to secure the minimum quantity necessary to manage the year-end selling season of next fiscal year,” Sony Group CFO Lin Tao said. “Going forward, we intend to further negotiate with various suppliers to secure enough [memory] supply to meet the demand of our customers.” The way these trends manifest into container volume is not entirely clear, but Gagnon cautioned that with prices likely to increase due to the memory cost issue, retailers might see sales stay steady or rise, but on a lower volume of units. That would, in turn, hit import volume. “It will definitely have a negative impact on volumes,” he said. “Retailers don’t care about volume as much as revenues. And it might be a situation where their revenues hold up because people are willing to pay more or need something and end up having to pay more.” <h3>Sourcing shift </h3>Another sectoral trend affecting volume is changes in sourcing patterns of consumer electronics tied to the size of a product and the composition of parts needed, Gagnon explained. For instance, television supply chains had long ago shifted production to Mexico, but during 2025 saw even more concentration in that market. “What had left China had gone to Southeast Asia but even that had moved to Mexico,” Gagnon said. "But the shift to Mexico didn’t happen broadly outside of large physical size products. For smaller products, there’s not a big benefit to have it more local.” He also said Mexico is suitable to television production because the some of the major component parts — metals and plastics — are not as sophisticated as those needed in other consumer product categories. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="df66d4d5-06ca-41b6-986e-bdb3b6d0346d"></dynamic-object></div>Meanwhile, historical behavior in the electronics sector suggests that when prices rise, consumers will either put off purchases, whether new or replacement, or they will engage in what Gagnon called “trade down behavior,” choosing a less expensive option if they need to buy. The forecast for consumer electronics manufacturing is not much better. S&amp;P Global Market Intelligence in late February revised its projection for global production of consumer electronics downward from 5.5% to 4.4%. The forecast noted that consumer electronics production tends to correlate loosely with global GDP. “Historically, the industry overperformed the global economy by 1.6 percentage points,” the report said. “Over the last 10 years, the gap between industry and global growth even got wider. The industry grew 5.2% on average per year, over-performing GDP growth by 2.4 percentage points.” So a tick down from the average growth rate over the past decade would indicate a slowing sector in a slowing economy. US imports of consumer electronics have lost ground three of the last four years, with 2024 being the outlier, according to PIERS data, adding weight to the slowdown theory not being an isolated trend. While China dominates the supply chain for consumer electronics — it accounted for 53% of global production in 2025 — S&amp;P Global Market Intelligence said the next 10 years will see supply concentration decrease. PIERS data shows that process already occurring, with Vietnam growing its share of US consumer electronic imports from 10.1% in 2020 to 18.1% in 2025, while China’s share decreased from 56.6% to 40.7% in the same period. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

(The following story appears in the Top 100 Importers and Exporters issue of the Journal of Commerce magazine to be published May 4, 2026.) Importers of consumer electronics affected by rising costs on US households in 2025 are facing dual threats to growth prospects in the year ahead: the impact of increased fuel costs on consumer discretionary spending and the skyrocketing price of memory due to demand from data center construction. That means there might be little respite for consumer electronics manufacturers and retailers after they saw containerized imports of those products dip 2.2% in 2025, according to data from PIERS, a sister product of the Journal of Commerce within S&P Global. “Energy prices and gas prices, that’s going to be a headline budgetary impact on the average household,” Paul Gagnon, vice president of consumer technology at market research firm Circana, told the Journal of Commerce. “We were already expecting consumer demand to not be great this year and that tariffs would have an impact. But food and other necessary purchases will delay demand for discretionary purchases.” A potentially bigger headwind for consumer electronics sales is the impact of memory prices. Gagnon said pricing for memory is up 400% year over year in the last few months. “Data centers use huge amounts of high bandwidth memory and the generators of that memory don’t have bandwidth to supply data centers and lower value memory that goes into consumer products,” he said. The impact of that dynamic won’t be isolated to the types of products most associated with memory, like laptops and tablets, but will be more widespread since virtually every consumer electronic good now has a memory component. “Any product that uses a lot of memory will be susceptible,” Gagnon said. “Even things that use memory indirectly, prices will go up.” Sony, during its fiscal third-quarter earnings call in February, noted the memory cost issue. “We are already in a position to secure the minimum quantity necessary to manage the year-end selling season of next fiscal year,” Sony Group CFO Lin Tao said. “Going forward, we intend to further negotiate with various suppliers to secure enough [memory] supply to meet the demand of our customers.” The way these trends manifest into container volume is not entirely clear, but Gagnon cautioned that with prices likely to increase due to the memory cost issue, retailers might see sales stay steady or rise, but on a lower volume of units. That would, in turn, hit import volume. “It will definitely have a negative impact on volumes,” he said. “Retailers don’t care about volume as much as revenues. And it might be a situation where their revenues hold up because people are willing to pay more or need something and end up having to pay more.” Sourcing shift Another sectoral trend affecting volume is changes in sourcing patterns of consumer electronics tied to the size of a product and the composition of parts needed, Gagnon explained. For instance, television supply chains had long ago shifted production to Mexico, but during 2025 saw even more concentration in that market. “What had left China had gone to Southeast Asia but even that had moved to Mexico,” Gagnon said. "But the shift to Mexico didn’t happen broadly outside of large physical size products. For smaller products, there’s not a big benefit to have it more local.” He also said Mexico is suitable to television production because the some of the major component parts — metals and plastics — are not as sophisticated as those needed in other consumer product categories. Meanwhile, historical behavior in the electronics sector suggests that when prices rise, consumers will either put off purchases, whether new or replacement, or they will engage in what Gagnon called “trade down behavior,” choosing a less expensive option if they need to buy. The forecast for consumer electronics manufacturing is not much better. S&P Global Market Intelligence in late February revised its projection for global production of consumer electronics downward from 5.5% to 4.4%. The forecast noted that consumer electronics production tends to correlate loosely with global GDP. “Historically, the industry overperformed the global economy by 1.6 percentage points,” the report said. “Over the last 10 years, the gap between industry and global growth even got wider. The industry grew 5.2% on average per year, over-performing GDP growth by 2.4 percentage points.” So a tick down from the average growth rate over the past decade would indicate a slowing sector in a slowing economy. US imports of consumer electronics have lost ground three of the last four years, with 2024 being the outlier, according to PIERS data, adding weight to the slowdown theory not being an isolated trend. While China dominates the supply chain for consumer electronics — it accounted for 53% of global production in 2025 — S&P Global Market Intelligence said the next 10 years will see supply concentration decrease. PIERS data shows that process already occurring, with Vietnam growing its share of US consumer electronic imports from 10.1% in 2020 to 18.1% in 2025, while China’s share decreased from 56.6% to 40.7% in the same period. Contact Eric Johnson at eric.johnson@spglobal.com .

US imports of consumer electronics face threats to growth plans

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