<div class="phx-topic abstract-wrapper">The British rock 'n' roll group the Who used to end concerts with their song ''Won't Get Fooled Agai</div>

The British rock 'n' roll group the Who used to end concerts with their song ''Won't Get Fooled Agai

<div>The British rock 'n' roll group the Who used to end concerts with their song ''Won't Get Fooled Again.'' Amid deafening music and blinding lights they would sing the last lines of the song, ''Meet the new boss - same as the old boss.''Today, this could be a searing anthem about the alliance of steamship lines in the trans-Atlantic trade.In the early 1990s, the trans-Atlantic trade was in dire financial condition. Some estimates were that ship lines collectively were losing $300 million a year. To stop the seemingly endless rate-cutting, the lines in the trade formed an alliance.The Trans-Atlantic Alliance...

The British rock 'n' roll group the Who used to end concerts with their song ''Won't Get Fooled Again.'' Amid deafening music and blinding lights they would sing the last lines of the song, ''Meet the new boss - same as the old boss.'' Today, this could be a searing anthem about the alliance of steamship lines in the trans-Atlantic trade.In the early 1990s, the trans-Atlantic trade was in dire financial condition. Some estimates were that ship lines collectively were losing $300 million a year. To stop the seemingly endless rate-cutting, the lines in the trade formed an alliance. The Trans-Atlantic Alliance (TAA) was developed to generate revenue recovery in the trade. Conferences, and discussion agreements, are only effective when the combined market share of the participants is formidable. (Two-thirds has often been considered a bare minimum.) Although the trans-Atlantic trade had traditionally made a clear delineation between former conference lines and the independent lines, TAA had the great idea of instituting a two-tiered structure. The bottom tier, consisting of lines with very unremarkable sales forces and customer service, would have freedom to aggressively price freight-forwarder traffic. The top tier would effectively hold the line on service contracts to actual customers. The results were immediately apparent. In fact, TAA was so successful that government regulators had to take action after an onslaught of complaints from shippers on both sides of the Atlantic. The European Commission ruled that rate cartels must have uniform pricing, and that the use of one-to-one service contracts must be expanded. The Federal Maritime Commission, which at the time was little more than a trade association for the shipping lines, also took some action, if only following the EC lead. In addition, at that time, several forces whose far-reaching impact was not readily apparent were at work. First, the ocean-shipping community was becoming actively organized. The National Industrial Transportation League, having accomplished most of its domestic agenda, became involved in international shipping. It also began to coordinate its activities with the European Shippers Council and similar organizations in Asia. The result was a six-year initiative that finally gave rise to the Ocean Shipping Reform Act, which was passed this year. While a great deal of attention has been paid to the impact of the trans-Pacific trades, it is safe to say that without TAA, there would not have been the critical mass to begin lobbying for ocean reform. In addition, the FMC became a much more active body. No doubt some of this renewed activity can be attributed to new appointments and initial plans, under original ocean shipping reform bills, to disband the agency. (An endangered regulatory agency becomes an activist out of self-preservation.) In 1994 TAA gave way to the Trans-Atlantic Conference Agreement (TACA). Although TACA tried to present itself as the kinder and gentler conference, shipper resentment lingered. But shipping options were limited and the trade remained profitable for the lines. Over the past two years, more carriers have entered the trade as independents. To appear global, lines needed to serve the trans-Atlantic. (The trade also seemed more profitable than others trades.) Existing customers urged these new entrants to avoid TACA, and many committed large volumes to induce independent entry. A group of carriers followed this strategy. New capacity equaled trade growth - and profitability remained. Things started to go awry this year. Unable to avoid further regulatory problems, TACA was fined $318 million for anticompetitive behavior (it appealed). Additional new entrants caused rates to start seriously eroding. Now, the 22 lines in the trans-Atlantic are trying to develop an offspring of TACA, TAA-3. The latest plan is to limit supply, rather than fix demand - a difficult proposition. Regulators could not object to lines removing entire vessel strings for cost savings. But such a move is unlikely because the charter market is weak and other trades already have too much capacity. There is no place for these displaced vessels. Regulators will most likely object to the other option: lines agreeing to ''voluntarily'' reducing space on existing vessels. They should not be too worried. The declared space on vessels is usually more than is operationally feasible. Lines are all for reasonable reductions, as long as they come from someone else. We will likely see quite a show between now and ocean shipping reform's implementation May 1, 1999. At that time, customer requirements and one-to-one contracting should finally prevail and confidential agreements should deal the final deathblow to conferences and discussion agreements. In the meantime lines are following the best practice of North Atlantic maritime policy, even though it may seem to some like rearranging the deck chairs on the Titanic. Happy New Year.

WON'T GET FOOLED AGAIN

<div class="phx-topic abstract-wrapper">This year’s positive MPV forecast is bolstered by a high level of forward bookings and the prospect of postponed projects coming onstream. </div>

This year’s positive MPV forecast is bolstered by a high level of forward bookings and the prospect of postponed projects coming onstream.

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<div class="phx-topic">An optimistic outlook for the multipurpose sector in 2026 is underpinned by a well-utilized fleet, revivals of postponed high-capacity projects, and a reportedly healthy level of forward bookings. Yorck Niclas Prehm, head of research at specialist shipbroker Toepfer Transport, said multipurpose vessel (MPV) operators with highly specialized vessels can look forward to an “even more comfortable” 2026. With super-heavy-lift vessels and vessels with offshore installation capabilities almost fully booked for 2026, operators are now focused on bookings for 2027 and 2028. In comments for the Journal of Commerce’s 2026 Annual Review and Outlook, Prehm said the multipurpose and breakbulk shipping market in 2025 was “characterized by minimal volatility and a stable and steady behavior of freight and charter rates.” Prehm added that while this could be viewed as “a rather boring development,” considering the economic and geopolitical challenges the shipping industry and global supply chains faced in 2025, the stability underscores how “extraordinarily strong and resilient this niche market is.” The foundation for this stability was the constraint on ordering exercised by owners and operators in the sector last year, Prehm said. In its end-of-year quarterly report, Toepfer Transport noted the order book for MPVs is “relatively moderate,” with total fleet growth in 2025 of 2.4% by deadweight tons, or 19 ships net. For freight rate assessments, the Toepfer Multipurpose Index for January, published Thursday, is $12,648 per day, down from $12,818 in December. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="eb684173-3331-459c-8c00-85ae47522402"></dynamic-object></div><h3>Positive outlook for year ahead </h3>Toepfer’s upbeat assessment for 2026 was echoed by Ulrich Ulrichs, CEO of MPV operator BBC Chartering. In comments for the Journal of Commerce’s Annual Review and Outlook, Ulrichs described his outlook for the breakbulk and project cargo sector in 2026 as positive. “Supply and demand in our sector appear to be reasonably balanced, and the number of newbuildings for the multipurpose vessel sector remains sparse,” Ulrichs said. New orders are for more efficient tonnage, phasing out older tonnage with no overcapacity being generated. In terms of cargo demand, Ulrichs said BBC is focused on the “dominant drivers” of energy-related cargoes from both the wind turbine sector and the oil and gas and mining sectors. However, he raised concerns about the offshore wind sector, “the success — or otherwise — of which is entirely due to political decision-making.” Regulations and geopolitics will continue to buffet the MPV sector in 2026, characterized by an “increasingly unpredictable” US market and “complex and region-specific regulations,” including the European Union Emissions Trading System and FuelEU Maritime, Ulrichs said. “While these initiatives aim to reduce environmental impact, their implementation has introduced significant operational and financial challenges — especially for carriers operating across multiple jurisdictions,” he said. Ulrichs called for a single, global, and transparent set of rules to reduce administrative overhead for MPV operations, level the playing field, and encourage broader compliance. Contact Carly Fields at <a href="mailto:carly.fields@spglobal.com">carly.fields@spglobal.com</a>. </div>

An optimistic outlook for the multipurpose sector in 2026 is underpinned by a well-utilized fleet, revivals of postponed high-capacity projects, and a reportedly healthy level of forward bookings. Yorck Niclas Prehm, head of research at specialist shipbroker Toepfer Transport, said multipurpose vessel (MPV) operators with highly specialized vessels can look forward to an “even more comfortable” 2026. With super-heavy-lift vessels and vessels with offshore installation capabilities almost fully booked for 2026, operators are now focused on bookings for 2027 and 2028. In comments for the Journal of Commerce’s 2026 Annual Review and Outlook, Prehm said the multipurpose and breakbulk shipping market in 2025 was “characterized by minimal volatility and a stable and steady behavior of freight and charter rates.” Prehm added that while this could be viewed as “a rather boring development,” considering the economic and geopolitical challenges the shipping industry and global supply chains faced in 2025, the stability underscores how “extraordinarily strong and resilient this niche market is.” The foundation for this stability was the constraint on ordering exercised by owners and operators in the sector last year, Prehm said. In its end-of-year quarterly report, Toepfer Transport noted the order book for MPVs is “relatively moderate,” with total fleet growth in 2025 of 2.4% by deadweight tons, or 19 ships net. For freight rate assessments, the Toepfer Multipurpose Index for January, published Thursday, is $12,648 per day, down from $12,818 in December. Positive outlook for year ahead Toepfer’s upbeat assessment for 2026 was echoed by Ulrich Ulrichs, CEO of MPV operator BBC Chartering. In comments for the Journal of Commerce’s Annual Review and Outlook, Ulrichs described his outlook for the breakbulk and project cargo sector in 2026 as positive. “Supply and demand in our sector appear to be reasonably balanced, and the number of newbuildings for the multipurpose vessel sector remains sparse,” Ulrichs said. New orders are for more efficient tonnage, phasing out older tonnage with no overcapacity being generated. In terms of cargo demand, Ulrichs said BBC is focused on the “dominant drivers” of energy-related cargoes from both the wind turbine sector and the oil and gas and mining sectors. However, he raised concerns about the offshore wind sector, “the success — or otherwise — of which is entirely due to political decision-making.” Regulations and geopolitics will continue to buffet the MPV sector in 2026, characterized by an “increasingly unpredictable” US market and “complex and region-specific regulations,” including the European Union Emissions Trading System and FuelEU Maritime, Ulrichs said. “While these initiatives aim to reduce environmental impact, their implementation has introduced significant operational and financial challenges — especially for carriers operating across multiple jurisdictions,” he said. Ulrichs called for a single, global, and transparent set of rules to reduce administrative overhead for MPV operations, level the playing field, and encourage broader compliance. Contact Carly Fields at carly.fields@spglobal.com .

Breakbulk News

Maritime

Optimistic outlook sets multipurpose sector on firm footing for 2026

<div class="phx-topic abstract-wrapper">The performance of the Cosco Shipping subsidiary provides an early glimpse of what to expect as ocean carriers prepare to report their full-year 2025 earnings in an uncertain container shipping market. </div>

The performance of the Cosco Shipping subsidiary provides an early glimpse of what to expect as ocean carriers prepare to report their full-year 2025 earnings in an uncertain container shipping market.

<div class="phx-topic">Weakening demand and falling rates on OOCL’s major trade lanes through the fourth quarter weighed heavily on the carrier’s full-year operating result announced Friday. The performance of the Hong Kong-based subsidiary of Cosco Shipping provides an early glimpse of what to expect as ocean carriers prepare to report their full-year 2025 earnings in an uncertain container shipping market. Solid earnings in the first three quarters of 2025 have ensured most carriers will report a profitable year — Drewry Shipping Consultants has forecast a combined $20 billion in profits — but the difficult fourth-quarter operating environment was reflected in OOCL’s revenue and volume. No profit and loss figures were disclosed by OOCL in its operating result. OOCL reported fourth-quarter revenue of $2.08 billion, a 17.2% year-over-year decline across its major trade lanes, while Q4 volume rose just 0.8% to 2 million TEUs. Available capacity increased 4.5% and average revenue per TEU plunged 17.8% compared to the 2024 fourth quarter. From a trade lane perspective, trans-Pacific revenue in Q4 was down 25% year over year at $726 million, with volume down 4.2% at 528,394 TEUs. Asia-Europe revenue fell 24.5% to $418 million while volume edged up 1.3% to 367,728 TEUs. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ea023e46-41d8-4790-b614-6af084fc81ec"></dynamic-object></div>OOCL’s largest trade lane, which combines Australasia with intra-Asia, saw revenue fall 6.8% to $772 million in the fourth quarter while volume rose 2.4% to 974,653 TEUs. The trans-Atlantic, the smallest of the carrier’s major trades, reported flat revenue of $163 million in Q4 and an 8.8% increase in volume to 130,231 TEUs. For the full year, OOCL revenue of $8.7 billion declined 10.6% year over year against volume that increased 3.7% to 7.8 million TEUs. Available capacity for the year was up 6.1% and average revenue per TEU dropped 13.7% year over year. Full-year revenue on the trans-Pacific of $3.2 billion was down 17.2% year over year, with volume up 1.7% at 2.1 million TEUs. Asia-Europe revenue came in at $1.8 billion, down 21.3%, and volume was flat at 1.4 million TEUs. Intra-Asia/Australasia revenue of $3 billion was up 1.2% and volume grew 4.8% to 3.8 million TEUs, while trans-Atlantic revenue increased 14.9% to $708 million and volume also rose 14.9% to 550,765 TEUs. <h3>Supply-demand imbalance hangs over market </h3>As carriers enter the new year, they will be buoyed by sharply increasing rates on the east-west trades out of Asia as shippers get their cargo on the water ahead of a relatively late start to the Lunar New Year on Feb. 17. Platts, a sister company of the Journal of Commerce within S&amp;P Global, pegged North Asia-US West Coast spot rates at $2,175 per FEU of Thursday, up from $1,270 per FEU on Dec. 12. Asia-North Europe rates of $2,700 per FEU this week are up from $2,440 per FEU four weeks ago. The World Container Index as assessed by Drewry pegged Shanghai-to-Los Angeles rates at $3,132 per FEU as of Thursday, up from $2,103 on Dec. 11. Shanghai-to-Rotterdam rates at $2,840 per FEU were up from $2,361 per FEU over the same period, according to Drewry. But with significant newbuilding capacity being added to the market, analysts expect excess tonnage to exert downwards pressure on rates. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="300082c3-330d-45f1-b9d8-9a63e1bb82b4"></dynamic-object></div>“A traditional pre-Lunar New Year cargo rush at the start of the 2026 is a key driver behind dramatic increases in spot rates out of the Far East that are up almost 60% into the US West Coast compared to a month ago,” Peter Sand, chief analyst at rate benchmarking platform Xeneta, wrote in a market update this week. “With Lunar New Year just over a month away, shippers will ramp up efforts to get goods out of the Far East before the holiday shutdown, so there will be further upward pressure on rates,” Sand added. “The question is whether the expected increase in deployed capacity will be enough to outweigh higher demand.” That question extends far beyond the first quarter of 2026. The full-year earnings prognosis is not positive for carriers, with analysts predicting that a growing imbalance between supply and demand will <a href="https://www.joc.com/article/supply-demand-imbalance-puts-ocean-carriers-on-course-for-heavy-losses-6143218">bring container shipping’s five-year run of profitability to an end</a>. With vessel capacity outstripping volumes on the major trade lanes, analysts expect carriers to fall into the red as early as the first quarter, culminating in a multi-billion-dollar combined loss for the full year. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com.</a></div>

Weakening demand and falling rates on OOCL’s major trade lanes through the fourth quarter weighed heavily on the carrier’s full-year operating result announced Friday. The performance of the Hong Kong-based subsidiary of Cosco Shipping provides an early glimpse of what to expect as ocean carriers prepare to report their full-year 2025 earnings in an uncertain container shipping market. Solid earnings in the first three quarters of 2025 have ensured most carriers will report a profitable year — Drewry Shipping Consultants has forecast a combined $20 billion in profits — but the difficult fourth-quarter operating environment was reflected in OOCL’s revenue and volume. No profit and loss figures were disclosed by OOCL in its operating result. OOCL reported fourth-quarter revenue of $2.08 billion, a 17.2% year-over-year decline across its major trade lanes, while Q4 volume rose just 0.8% to 2 million TEUs. Available capacity increased 4.5% and average revenue per TEU plunged 17.8% compared to the 2024 fourth quarter. From a trade lane perspective, trans-Pacific revenue in Q4 was down 25% year over year at $726 million, with volume down 4.2% at 528,394 TEUs. Asia-Europe revenue fell 24.5% to $418 million while volume edged up 1.3% to 367,728 TEUs. OOCL’s largest trade lane, which combines Australasia with intra-Asia, saw revenue fall 6.8% to $772 million in the fourth quarter while volume rose 2.4% to 974,653 TEUs. The trans-Atlantic, the smallest of the carrier’s major trades, reported flat revenue of $163 million in Q4 and an 8.8% increase in volume to 130,231 TEUs. For the full year, OOCL revenue of $8.7 billion declined 10.6% year over year against volume that increased 3.7% to 7.8 million TEUs. Available capacity for the year was up 6.1% and average revenue per TEU dropped 13.7% year over year. Full-year revenue on the trans-Pacific of $3.2 billion was down 17.2% year over year, with volume up 1.7% at 2.1 million TEUs. Asia-Europe revenue came in at $1.8 billion, down 21.3%, and volume was flat at 1.4 million TEUs. Intra-Asia/Australasia revenue of $3 billion was up 1.2% and volume grew 4.8% to 3.8 million TEUs, while trans-Atlantic revenue increased 14.9% to $708 million and volume also rose 14.9% to 550,765 TEUs. Supply-demand imbalance hangs over market As carriers enter the new year, they will be buoyed by sharply increasing rates on the east-west trades out of Asia as shippers get their cargo on the water ahead of a relatively late start to the Lunar New Year on Feb. 17. Platts, a sister company of the Journal of Commerce within S&P Global, pegged North Asia-US West Coast spot rates at $2,175 per FEU of Thursday, up from $1,270 per FEU on Dec. 12. Asia-North Europe rates of $2,700 per FEU this week are up from $2,440 per FEU four weeks ago. The World Container Index as assessed by Drewry pegged Shanghai-to-Los Angeles rates at $3,132 per FEU as of Thursday, up from $2,103 on Dec. 11. Shanghai-to-Rotterdam rates at $2,840 per FEU were up from $2,361 per FEU over the same period, according to Drewry. But with significant newbuilding capacity being added to the market, analysts expect excess tonnage to exert downwards pressure on rates. “A traditional pre-Lunar New Year cargo rush at the start of the 2026 is a key driver behind dramatic increases in spot rates out of the Far East that are up almost 60% into the US West Coast compared to a month ago,” Peter Sand, chief analyst at rate benchmarking platform Xeneta, wrote in a market update this week. “With Lunar New Year just over a month away, shippers will ramp up efforts to get goods out of the Far East before the holiday shutdown, so there will be further upward pressure on rates,” Sand added. “The question is whether the expected increase in deployed capacity will be enough to outweigh higher demand.” That question extends far beyond the first quarter of 2026. The full-year earnings prognosis is not positive for carriers, with analysts predicting that a growing imbalance between supply and demand will bring container shipping’s five-year run of profitability to an end . With vessel capacity outstripping volumes on the major trade lanes, analysts expect carriers to fall into the red as early as the first quarter, culminating in a multi-billion-dollar combined loss for the full year. Contact Greg Knowler at greg.knowler@spglobal.com.

Container lines

Asia-Europe

Trans-Pacific

Container Shipping News

Fourth-quarter downturn weighs on OOCL’s full-year operating result

<div class="phx-topic abstract-wrapper">The merger will see Fatton &amp; Lyseo use Ovrsea’s proprietary operating software across its air and sea customers in Asia, Africa and North America. </div>

The merger will see Fatton & Lyseo use Ovrsea’s proprietary operating software across its air and sea customers in Asia, Africa and North America.

<div class="phx-topic">French forwarding group Fatton &amp; Lyseo on Thursday said it has merged operations with Ovrsea, a digital forwarder owned by the Bolloré Group. The merger will see Fatton &amp; Lyseo, itself the combination of a 2024 merger between two French forwarders, use Ovrsea’s proprietary operating software across its air and sea customers in Asia, Africa and North America. Financial terms of the deal were not disclosed. Ovrsea CEO Arthur Barillas de Thé will become CEO of the joint company, with Fatton &amp; Lyseo CEO Sylvain Fatton moving into a chairman role. The combined company brings 350 million euros of revenue across 60 offices in 14 countries, with 1,000 employees. “By combining over a century of operational excellence with pioneering digital technology and talent, we are creating a unique offering and position ourselves for strong organic and external growth in the future,” Barillas de Thé said in a LinkedIn post announcing the merger. Ovrsea was founded in 2017 as part of a cohort of so-called digital forwarders such as Flexport, Forto, iContainers, Nowports, and ExFreight as a technology-focused alternative to established global third-party logistics providers (3PLs) and non-vessel-operating common carriers. Unlike most of its cohorts, Paris-based Ovrsea eschewed major investment from venture capital or private equity firms, instead selling a majority stake in 2021 to the Bolloré Group, where it served as the 3PL’s digital customer channel and operated independently. <a href="https://www.joc.com/article/bollor-backed-startup-ovrsea-expands-digital-forwarding-options-to-us-5222142">Ovrsea entered the US market</a> a year later on the basis of the relationship with Bolloré. Its customers generally move in the range of 200 to 1,000 TEUs annually. Fatton &amp; Lyseo provides ocean, air, warehousing and customs services. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

French forwarding group Fatton & Lyseo on Thursday said it has merged operations with Ovrsea, a digital forwarder owned by the Bolloré Group. The merger will see Fatton & Lyseo, itself the combination of a 2024 merger between two French forwarders, use Ovrsea’s proprietary operating software across its air and sea customers in Asia, Africa and North America. Financial terms of the deal were not disclosed. Ovrsea CEO Arthur Barillas de Thé will become CEO of the joint company, with Fatton & Lyseo CEO Sylvain Fatton moving into a chairman role. The combined company brings 350 million euros of revenue across 60 offices in 14 countries, with 1,000 employees. “By combining over a century of operational excellence with pioneering digital technology and talent, we are creating a unique offering and position ourselves for strong organic and external growth in the future,” Barillas de Thé said in a LinkedIn post announcing the merger. Ovrsea was founded in 2017 as part of a cohort of so-called digital forwarders such as Flexport, Forto, iContainers, Nowports, and ExFreight as a technology-focused alternative to established global third-party logistics providers (3PLs) and non-vessel-operating common carriers. Unlike most of its cohorts, Paris-based Ovrsea eschewed major investment from venture capital or private equity firms, instead selling a majority stake in 2021 to the Bolloré Group, where it served as the 3PL’s digital customer channel and operated independently. Ovrsea entered the US market a year later on the basis of the relationship with Bolloré. Its customers generally move in the range of 200 to 1,000 TEUs annually. Fatton & Lyseo provides ocean, air, warehousing and customs services. Contact Eric Johnson at eric.johnson@spglobal.com .

Logistics Technology News

Digital forwarder owned by Bolloré merges with French forwarding group

<div class="phx-topic abstract-wrapper">The growth in traffic on intra-Asian routes is a result of ongoing US demand for cloud infrastructure logistics related to the rapid development of AI technology.</div>

The growth in traffic on intra-Asian routes is a result of ongoing US demand for cloud infrastructure logistics related to the rapid development of AI technology.

<div class="phx-topic">Strong US air cargo demand for high-tech and AI-related exports from Southeast Asia is having the indirect effect of placing intra-Asia capacity under mounting pressure as most flights to North America are routed via regional transit hubs. While the air cargo industry prepares for Asian export volume to rise over the next few weeks in line with seasonal demand ahead of the Lunar New Year that begins on Feb. 17, forwarders are already reporting congestion at some of the region’s key airports. Kathy Liu, vice president of global sales and marketing at Taiwan-based Dimerco Express Group, said the China-plus-one production strategy, accelerated by US tariffs last year, was strengthening intra-Asia demand. “This will further constrain intra-Asia capacity, as transit carriers are prioritizing first-leg capacity for long-haul cargo to maximize revenue,” Liu told the Journal of Commerce Thursday. “As a result, major transit hubs such as Hong Kong, Taipei, Singapore, Incheon and Narita are expected to remain highly congested.” The growth in traffic on intra-Asian routes is being accelerated by US tariffs imposed on Beijing in 2025 that led to a shift in regional trade flows through the second half of the year and drove increasing demand from Southeast Asian origins. Tobias Hofemeier, senior vice president for air logistics in greater China at Kuehne + Nagel, said there was ongoing high demand for cloud infrastructure logistics related to the rapid development of AI technology. He cited data from research and advisory firm Gartner projecting 21.3% year-over-year growth in public cloud services in 2026. “We expect continued growth in Southeast Asian countries like Thailand and Vietnam ... due to strong demand driven primarily by high tech, electronics and semiconductor cargo,” Hofemeier said. Kuehne + Nagel uses available commercial capacity on the trans-Pacific and supplements that with nine Kuehne + Nagel-dedicated flights per week from Vietnam to the US and six flights from Taiwan to the US. <h3>Freighter capacity constraints </h3>Air freight capacity data from analyst Rotate shows high growth in direct flights on the Southeast Asia-North America trade lane in the past week, but much of the cargo on that corridor is shipped indirectly to the US through Asian transit hubs. While demand increases, overall capacity, especially belly capacity on commercial flights, is projected to remain at 2025 levels because of delays in aircraft deliveries. Boeing and Airbus have been facing long delays in producing, certifying and delivering new aircraft, severely constricting the ability of airlines to grow their fleets. Another capacity-limiting factor for the industry is the grounding of all McDonnell Douglas MD-11 freighters and DC-10s following the fatal crash in Louisville, Kentucky, in November. Most of the 70 freighters are operated by FedEx and UPS (52 planes) and will be grounded indefinitely. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="a3f6b9ed-e750-40e5-8b28-b4d1703b5c40"></dynamic-object></div>Sou Ping Chee, regional head of air freight in Asia Pacific for Hellmann Worldwide Logistics, said capacity provided by commercial airlines comprised more than 80% of the global market. ”It will remain tight this year because there’s no significant additional capacity being added with few new freighter aircrafts that will be delivered this year,” he told the Journal of Commerce Thursday. But an unknown factor was how much chartered freighter capacity would return to the market this year and what impact it would have on increasing available space. Chee explained that when the US scrapped the de minimis exemption for low-value Chinese imports in May last year and demand tumbled on the trans-Pacific, many chartered freighters were redeployed to other routes. "Charters are committed for at least for a year and they had to somehow find a way to keep flying and filling their aircraft,” Chee said. “This year onwards, some of the e-commerce charter contracts will be due for renewal, so it will be interesting to see how many are renewed and how much capacity is returned to the market.” <h3>Tailwinds of growth</h3>In his latest monthly market update, Niall van de Wouw, chief air freight officer at rate benchmarking platform Xeneta, said one of the tailwinds of demand growth in 2025 came from investment linked to the development of AI solutions. But he warned that the less buoyant forward-looking signals for Chinese e-commerce exports were worrying. Despite a sharp drop in US business, China’s air freight exports are still dominated by e-commerce that comprises approximately one-third of the country’s total air cargo volume. “China’s cross-border e-commerce volumes were flat in October and November,” van de Wouw said. “If we see a third consecutive month of lower e-commerce growth out of China, that is a big signal, while duties imposed by other countries may present more unwelcome news for the air cargo market going forward.” Chinese customs data shows low-value and e-commerce exports in November rose by just 1% year over year after flatlining in October. Exports to the US represented the majority of the decline, falling 52% year over year in November after a drop of 51% in October. Before the de minimis ban imposed by Washington, China-US e-commerce accounted for approximately 3% of global air cargo volumes. China-European Union e-commerce volume continued to grow, expanding 29% in November following 47% year-over-year growth in October. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Strong US air cargo demand for high-tech and AI-related exports from Southeast Asia is having the indirect effect of placing intra-Asia capacity under mounting pressure as most flights to North America are routed via regional transit hubs. While the air cargo industry prepares for Asian export volume to rise over the next few weeks in line with seasonal demand ahead of the Lunar New Year that begins on Feb. 17, forwarders are already reporting congestion at some of the region’s key airports. Kathy Liu, vice president of global sales and marketing at Taiwan-based Dimerco Express Group, said the China-plus-one production strategy, accelerated by US tariffs last year, was strengthening intra-Asia demand. “This will further constrain intra-Asia capacity, as transit carriers are prioritizing first-leg capacity for long-haul cargo to maximize revenue,” Liu told the Journal of Commerce Thursday. “As a result, major transit hubs such as Hong Kong, Taipei, Singapore, Incheon and Narita are expected to remain highly congested.” The growth in traffic on intra-Asian routes is being accelerated by US tariffs imposed on Beijing in 2025 that led to a shift in regional trade flows through the second half of the year and drove increasing demand from Southeast Asian origins. Tobias Hofemeier, senior vice president for air logistics in greater China at Kuehne + Nagel, said there was ongoing high demand for cloud infrastructure logistics related to the rapid development of AI technology. He cited data from research and advisory firm Gartner projecting 21.3% year-over-year growth in public cloud services in 2026. “We expect continued growth in Southeast Asian countries like Thailand and Vietnam ... due to strong demand driven primarily by high tech, electronics and semiconductor cargo,” Hofemeier said. Kuehne + Nagel uses available commercial capacity on the trans-Pacific and supplements that with nine Kuehne + Nagel-dedicated flights per week from Vietnam to the US and six flights from Taiwan to the US. Freighter capacity constraints Air freight capacity data from analyst Rotate shows high growth in direct flights on the Southeast Asia-North America trade lane in the past week, but much of the cargo on that corridor is shipped indirectly to the US through Asian transit hubs. While demand increases, overall capacity, especially belly capacity on commercial flights, is projected to remain at 2025 levels because of delays in aircraft deliveries. Boeing and Airbus have been facing long delays in producing, certifying and delivering new aircraft, severely constricting the ability of airlines to grow their fleets. Another capacity-limiting factor for the industry is the grounding of all McDonnell Douglas MD-11 freighters and DC-10s following the fatal crash in Louisville, Kentucky, in November. Most of the 70 freighters are operated by FedEx and UPS (52 planes) and will be grounded indefinitely. Sou Ping Chee, regional head of air freight in Asia Pacific for Hellmann Worldwide Logistics, said capacity provided by commercial airlines comprised more than 80% of the global market. ”It will remain tight this year because there’s no significant additional capacity being added with few new freighter aircrafts that will be delivered this year,” he told the Journal of Commerce Thursday. But an unknown factor was how much chartered freighter capacity would return to the market this year and what impact it would have on increasing available space. Chee explained that when the US scrapped the de minimis exemption for low-value Chinese imports in May last year and demand tumbled on the trans-Pacific, many chartered freighters were redeployed to other routes. "Charters are committed for at least for a year and they had to somehow find a way to keep flying and filling their aircraft,” Chee said. “This year onwards, some of the e-commerce charter contracts will be due for renewal, so it will be interesting to see how many are renewed and how much capacity is returned to the market.” Tailwinds of growth In his latest monthly market update, Niall van de Wouw, chief air freight officer at rate benchmarking platform Xeneta, said one of the tailwinds of demand growth in 2025 came from investment linked to the development of AI solutions. But he warned that the less buoyant forward-looking signals for Chinese e-commerce exports were worrying. Despite a sharp drop in US business, China’s air freight exports are still dominated by e-commerce that comprises approximately one-third of the country’s total air cargo volume. “China’s cross-border e-commerce volumes were flat in October and November,” van de Wouw said. “If we see a third consecutive month of lower e-commerce growth out of China, that is a big signal, while duties imposed by other countries may present more unwelcome news for the air cargo market going forward.” Chinese customs data shows low-value and e-commerce exports in November rose by just 1% year over year after flatlining in October. Exports to the US represented the majority of the decline, falling 52% year over year in November after a drop of 51% in October. Before the de minimis ban imposed by Washington, China-US e-commerce accounted for approximately 3% of global air cargo volumes. China-European Union e-commerce volume continued to grow, expanding 29% in November following 47% year-over-year growth in October. Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo

Intra-Asia air freight capacity tightens on US high-tech demand

<div class="phx-topic abstract-wrapper">While second- and third-rung lines can no longer aspire to grow into the big leagues unless they have very deep pockets, there is plenty of scope to avoid being trampled by the behemoths and quietly grow by trading on strengths, writes Jeremy Masters. </div>

While second- and third-rung lines can no longer aspire to grow into the big leagues unless they have very deep pockets, there is plenty of scope to avoid being trampled by the behemoths and quietly grow by trading on strengths, writes Jeremy Masters.

<div class="phx-topic">As Alphaliner recently reported, Mediterranean Shipping Co. has reached the milestone of 7 million TEUs in vessel capacity, and the eight largest carriers — the 1 million-plus-TEU club — now operate upward of 80% of global capacity. The difference in punching power between MSC’s 7 million TEUs at No. 1 and Yang Ming’s 725,000 TEUs at No. 9 is already huge, but by the time we get to KMTC at No. 15, their fleet size is just 160,000 TEUs. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6148856_0.1.jpg"></img></div>Within their ocean capacity expansion, carriers such as MSC and CMA CGM have scooped up a tremendous amount of second-hand tonnage from non-operating carriers in the smaller size ships, with the side effect of creating inelasticity of supply and higher prices in the charter market. MSC subsidiary Terminal Investment Limited (TiL) seeks to become the largest terminal operator globally. Maersk, CMA CGM, Cosco, Hapag-Lloyd, Evergreen and Ocean Network Express (ONE) also have substantial levels of terminal operating capacity directly and through subsidiary companies and want to build further. Expansion into logistics has further widened their capabilities, although in this case the big carriers do not have a commanding position. The fact that an elite set of carriers can now significantly control the global ocean sector, the container handling at many key hubs and, increasingly, the delivery to outports — and selectively to inland points — makes it tough for the rest of the carriers to compete comprehensively. <h3>Where the smaller lines dwell </h3>Midsize and smaller carriers having to find their way in a jungle of voracious predators is nothing new, but the predators are bigger and better equipped than ever before. So how can they prosper? Looking beyond Zim Integrated Shipping Services, Wan Hai Lines and Pacific International Lines (PIL) — numbers 10, 11 and 12, respectively — which are not global operators but still have extensive networks, the rest of the top 30 fall into one or more of the following categories: pure regional carriers focused on one or two key regions, regional carriers focused on one or two key regions but with some deep-sea services that connect to their regional stronghold, or feeder operators that also have selective deep-sea routes. For numbers 13 to 30, operated ship sizes are highly concentrated in the 1,000- to 8,000-TEU range, and the largest subcategories are below 3,000 TEUs. Whereas most of the big carriers have a balanced owned and charter fleet — and thus benefit from some averaging of costs — the midsize carrier fleets can range from almost 100% owned to 100% chartered. These two factors combine to give many of the smaller carriers a sizeable and volatile slot-cost deficiency in the major trades. <h3>Survive and prosper </h3>Midsize carriers with smaller ships can still participate in longer-haul big-ship trades, but they have to be opportunistic, as we have seen with Asia-North America West Coast. When cargo is insufficient and rates are low — as they are right now — there is a high likelihood that they starve, get eaten or both. Otherwise, it’s best they focus on trades predominantly populated by sub-8,000-TEU ships, so that their slot economics are competitive. Some of the more successful midsize carriers in long-haul trades have built out from a regional stronghold providing cargo flows that can be more sticky and less subject to acute rate volatility. If they also operate from regions such as the Mediterranean or Southeast Asia, with significant connecting cargo possibilities, that enhances the pool of cargo and allows for some selectivity. Within any trade there are choices of port call, so it’s good to find some less-populated submarkets. There are six services linking Antwerp with New York, for example, but only one service linking Ringaskiddy, Ireland, with Wilmington, North Carolina. A particularly viable focus for midsize carriers is high-growth regional trades such as intra-Asia, where those that operate with a competitive ship system cost, a lean organization and some niche products can happily survive, especially given that the biggest carriers often focus on the wayport legs in these trades. Whatever the size of the trade, the midsize and smaller carriers are well placed to design key client-focused services that are differentiated from a product or customer-service point of view. It’s no longer a world in which the second- and third-rung lines can aspire to grow into the big leagues, unless they have very deep pockets. There is, however, plenty of scope to avoid being trampled by the behemoths, differentiate and quietly grow by trading on strengths. Being nimble, lean and highly client-focused are key attributes for this segment. Jeremy Masters is managing director of Shipping Masters. Contact him at <a href="mailto:jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>. </div>

As Alphaliner recently reported, Mediterranean Shipping Co. has reached the milestone of 7 million TEUs in vessel capacity, and the eight largest carriers — the 1 million-plus-TEU club — now operate upward of 80% of global capacity. The difference in punching power between MSC’s 7 million TEUs at No. 1 and Yang Ming’s 725,000 TEUs at No. 9 is already huge, but by the time we get to KMTC at No. 15, their fleet size is just 160,000 TEUs. Within their ocean capacity expansion, carriers such as MSC and CMA CGM have scooped up a tremendous amount of second-hand tonnage from non-operating carriers in the smaller size ships, with the side effect of creating inelasticity of supply and higher prices in the charter market. MSC subsidiary Terminal Investment Limited (TiL) seeks to become the largest terminal operator globally. Maersk, CMA CGM, Cosco, Hapag-Lloyd, Evergreen and Ocean Network Express (ONE) also have substantial levels of terminal operating capacity directly and through subsidiary companies and want to build further. Expansion into logistics has further widened their capabilities, although in this case the big carriers do not have a commanding position. The fact that an elite set of carriers can now significantly control the global ocean sector, the container handling at many key hubs and, increasingly, the delivery to outports — and selectively to inland points — makes it tough for the rest of the carriers to compete comprehensively. Where the smaller lines dwell Midsize and smaller carriers having to find their way in a jungle of voracious predators is nothing new, but the predators are bigger and better equipped than ever before. So how can they prosper? Looking beyond Zim Integrated Shipping Services, Wan Hai Lines and Pacific International Lines (PIL) — numbers 10, 11 and 12, respectively — which are not global operators but still have extensive networks, the rest of the top 30 fall into one or more of the following categories: pure regional carriers focused on one or two key regions, regional carriers focused on one or two key regions but with some deep-sea services that connect to their regional stronghold, or feeder operators that also have selective deep-sea routes. For numbers 13 to 30, operated ship sizes are highly concentrated in the 1,000- to 8,000-TEU range, and the largest subcategories are below 3,000 TEUs. Whereas most of the big carriers have a balanced owned and charter fleet — and thus benefit from some averaging of costs — the midsize carrier fleets can range from almost 100% owned to 100% chartered. These two factors combine to give many of the smaller carriers a sizeable and volatile slot-cost deficiency in the major trades. Survive and prosper Midsize carriers with smaller ships can still participate in longer-haul big-ship trades, but they have to be opportunistic, as we have seen with Asia-North America West Coast. When cargo is insufficient and rates are low — as they are right now — there is a high likelihood that they starve, get eaten or both. Otherwise, it’s best they focus on trades predominantly populated by sub-8,000-TEU ships, so that their slot economics are competitive. Some of the more successful midsize carriers in long-haul trades have built out from a regional stronghold providing cargo flows that can be more sticky and less subject to acute rate volatility. If they also operate from regions such as the Mediterranean or Southeast Asia, with significant connecting cargo possibilities, that enhances the pool of cargo and allows for some selectivity. Within any trade there are choices of port call, so it’s good to find some less-populated submarkets. There are six services linking Antwerp with New York, for example, but only one service linking Ringaskiddy, Ireland, with Wilmington, North Carolina. A particularly viable focus for midsize carriers is high-growth regional trades such as intra-Asia, where those that operate with a competitive ship system cost, a lean organization and some niche products can happily survive, especially given that the biggest carriers often focus on the wayport legs in these trades. Whatever the size of the trade, the midsize and smaller carriers are well placed to design key client-focused services that are differentiated from a product or customer-service point of view. It’s no longer a world in which the second- and third-rung lines can aspire to grow into the big leagues, unless they have very deep pockets. There is, however, plenty of scope to avoid being trampled by the behemoths, differentiate and quietly grow by trading on strengths. Being nimble, lean and highly client-focused are key attributes for this segment. Jeremy Masters is managing director of Shipping Masters. Contact him at jeremy@shippingmastershk.com .

Smaller ocean carriers can still prosper in a world of hungry ‘predators’

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