<div class="phx-topic abstract-wrapper">Hot on the heels of his New York primary win, Massachusetts Gov. Michael Dukakis celebrated his seco</div>

Hot on the heels of his New York primary win, Massachusetts Gov. Michael Dukakis celebrated his seco

<div>Hot on the heels of his New York primary win, Massachusetts Gov. Michael Dukakis celebrated his second major victory in three days by signing into law his first-in-the-nation universal health insurance plan.Standing at the foot of the statehouse steps, with hundreds of administration officials legislators and supporters who helped win passage for the bill over the past nine months, the governor called the plan, the most remarkable example of cooperation and teamwork that I have seen in 25 years of public life.The controversial measure, which will provide coverage for 600,000 uninsured Massachusetts residents by 1992, may turn out to be...

Hot on the heels of his New York primary win, Massachusetts Gov. Michael Dukakis celebrated his second major victory in three days by signing into law his first-in-the-nation universal health insurance plan. Standing at the foot of the statehouse steps, with hundreds of administration officials legislators and supporters who helped win passage for the bill over the past nine months, the governor called the plan, the most remarkable example of cooperation and teamwork that I have seen in 25 years of public life.The controversial measure, which will provide coverage for 600,000 uninsured Massachusetts residents by 1992, may turn out to be as crucial to the governor as the primary that made him the front-runner for the Democratic nomination. While Dukakis aides have denied that the motivation and timing of the landmark legislation has had anything to do with politics, they concede it be the vehicle for the governor's national message. We all know that we made a great start, the governor said. Now we must make it work. And then we must carry the message - of health care for all - all across this country. Aides also feel the program may go a long way to addressing criticisms that the governor is a cold technocrat who does not care about human issues and whose campaign lacks substance. Hale Champion, the governor's chief adviser, said in an interview that the Dukakis image has been misperceived and that his caring shows itself in a range of programs from job training to day-care. The former undersecretary of Health Education and Welfare also denied that he, rather than Gov. Dukakis, was the driving force behind the health- care concern. Universal coverage was a Dukakis goal from the start, often in spite of possible political consequences, he said. It wasn't unrecognized how big a political risk it was. Sasso didn't pronounce himself against it; he just said it made him very nervous, said Mr. Champion, referring to former campaign director John Sasso, who resigned last year after leaks aimed at the campaign of Sen. Joseph Biden, D-Del. It wasn't embarked on on the notion that it would be a great asset. It was embarked on on the notion that it would be good if you won and terrible if you lost, Mr. Champion said. There were risks on both sides, but it was not a risk that anybody felt was worth taking for the sake of the presidential campaign. Mr. Sasso, now a Boston advertising executive, declined to comment on Mr. Champion's remarks. Dukakis aides moved quickly Wednesday to counter criticism that the governor did not have a grasp of state costs for his new health program following a Tuesday news conference in which he appeared unable to give precise cost estimates. At a press conference Wednesday, the governor released new estimates that forecast a state revenue obligation of from $622 million to $660 million over the next four years. The figures are far lower than House estimates of as much as $1.4 billion and rely on more optimistic projections of state contributions to an uncompensated care pool for the uninsured. But Catherine Dunham, director of the Office of Human Resources, said she is confident that the governor's latest figures are consistent with legislative estimates, once differences in cost components are sorted out. Critics have said that the governor's focus on the moral obligation to provide health care resulted in scant concern for costs or financing. But defenders argue that the approach may have been necessary to the passage of such a far-reaching initiative. The only way to get an entitlement in place is to emphasize the social benefits and to argue that it ought to be paid for and that we'll find a way to pay for it, said Leon White, vice president of provider payment for Massachusetts Blue Cross Blue Shield.

DUKAKIS SIGNS MASS. HEALTH BILL INTO LAW

<div class="phx-topic abstract-wrapper">The American Trucking Associations February truck tonnage report showed a 2.6% month-over-month increase, making it the largest sequential gain in three years.</div>

The American Trucking Associations February truck tonnage report showed a 2.6% month-over-month increase, making it the largest sequential gain in three years.

Feature image

<div class="phx-topic">Soaring diesel fuel prices and the nationwide crackdown by the federal government on non-domiciled commercial drivers is tightening truckload capacity in the US, putting a floor under rates. And new data showing that demand may be perking up has raised hopes in the trucking industry, albeit cautiously, that the freight recession going on four years could be nearing an end. Still, trucking executives say for any recovery to be long-term, demand needs to show steady and solid growth over several months. The American Trucking Associations (ATA) February truck tonnage report showed a 2.6% month-over-month increase, making it the largest sequential gain in three years, according to Bob Costello, the group’s chief economist. On a year-over-year basis, the increase was 2.1%. “February’s robust gain is great to see, but the size of the gain is likely magnified due to lower industry capacity,” Costello said in a statement. “Particularly after a very prolonged freight recession, improving volumes in any manner is welcomed.” Capacity, meanwhile, is being crimped by diesel prices that have rocketed higher since the war in the Middle East began Feb. 28, forcing many small and mid-size drivers to park their trucks given the fast-rising expense. The average price of on-highway diesel in the US jumped to almost $5.38 per gallon as of March 23, up 30 cents in one week and $1.80 higher than it was a year ago. Prices in California were at $6.87/gal. The sudden and steep increase in diesel is impacting capacity, according to Dean Croke, principal analyst for DAT Freight &amp; Analytics. “Diesel is up about $1.30 a gallon since the war started and that’s really crushed a lot of the small carriers because they’ve haven’t been able to get the full fuel surcharge built into the loads,” Croke said. “A lot of carriers are saying they’re going to sit this out until things stabilize.” The latest information on rates from DAT showed that for the week ending March 21, dry van spot rates were flat week-to-week at $1.92 per mile. Reefer spot rates increased to $2.32 per mile, up 2 cents, and flatbed spot rates moved 3 cents higher to $2.34 per mile. DAT said as fuel surcharges have increased 44% to 64 cents per mile, carriers are struggling to negotiate load-by-load rate increases that fully offset the higher prices for diesel. “Capacity is tightening. It is putting a floor on rates that we’ve not seen in many years,” Croke said. “I suspect as you get into the spring building, construction and nursery season volume bump, you’ll see rates start to move up again.” <h3>CDLs culled in California </h3>Adding to the tightening capacity is the <a href="https://www.joc.com/article/capacity-cuts-fuel-shocks-provide-openings-for-trucking-and-rail-6188739">US Department of Transportation’s crackdown</a> on non-domiciled CDLs while toughening standards around the English language proficiency of all drivers. The Federal Motor Carrier Safety Administration (FMCSA) has canceled an estimated 13,000 CDLs in California. Raman Dillon, president of the 2,000- member North American Punjabi Trucking Association, said the loss of those drivers and high diesel prices will continue to tighten capacity in the state. “The drivers are suffering and the impact on the public and the supply chain has yet to be seen,” Dillon told the Journal of Commerce. “These CDLs were not picked up at a convenience store, they were issued by the government. You cannot say that every one of the 13,000 drivers they took out is a bad driver... “We feel like we are being made scapegoats, but it will tighten capacity, because our industry has a shortage of good drivers,” he added. Dillon agreed with Croke that high diesel prices will push drivers to the sidelines, at least for the time being, tightening capacity and impacting shippers by making it more costly and harder to find dependable ways to more freight. “We have diesel in some places being sold for seven dollars or more a gallon, and that’s a surcharge that you and me, we’re going to pay,” he said. “Everything is going to get more expensive.” <a href="https://www.joc.com/article/house-committee-advances-bill-targeting-non-domiciled-commercial-drivers-licenses-6188801">Legislation making its way through Congress</a>, meanwhile, contains several provisions that go far beyond the scope of the FMCSA’s rule restricting non-domiciled CDLs, which the agency estimates could remove up to 194,000 drivers from the market over five years. Still, the trucking industry is <a href="https://www.joc.com/article/impact-of-non-domiciled-cdl-enforcement-splits-us-trucking-sector-6135184">split on whether the federal regulations will significantly impact trucking and drayage capacity</a> amid the more than four-year freight recession. Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com.</a></div>

Soaring diesel fuel prices and the nationwide crackdown by the federal government on non-domiciled commercial drivers is tightening truckload capacity in the US, putting a floor under rates. And new data showing that demand may be perking up has raised hopes in the trucking industry, albeit cautiously, that the freight recession going on four years could be nearing an end. Still, trucking executives say for any recovery to be long-term, demand needs to show steady and solid growth over several months. The American Trucking Associations (ATA) February truck tonnage report showed a 2.6% month-over-month increase, making it the largest sequential gain in three years, according to Bob Costello, the group’s chief economist. On a year-over-year basis, the increase was 2.1%. “February’s robust gain is great to see, but the size of the gain is likely magnified due to lower industry capacity,” Costello said in a statement. “Particularly after a very prolonged freight recession, improving volumes in any manner is welcomed.” Capacity, meanwhile, is being crimped by diesel prices that have rocketed higher since the war in the Middle East began Feb. 28, forcing many small and mid-size drivers to park their trucks given the fast-rising expense. The average price of on-highway diesel in the US jumped to almost $5.38 per gallon as of March 23, up 30 cents in one week and $1.80 higher than it was a year ago. Prices in California were at $6.87/gal. The sudden and steep increase in diesel is impacting capacity, according to Dean Croke, principal analyst for DAT Freight & Analytics. “Diesel is up about $1.30 a gallon since the war started and that’s really crushed a lot of the small carriers because they’ve haven’t been able to get the full fuel surcharge built into the loads,” Croke said. “A lot of carriers are saying they’re going to sit this out until things stabilize.” The latest information on rates from DAT showed that for the week ending March 21, dry van spot rates were flat week-to-week at $1.92 per mile. Reefer spot rates increased to $2.32 per mile, up 2 cents, and flatbed spot rates moved 3 cents higher to $2.34 per mile. DAT said as fuel surcharges have increased 44% to 64 cents per mile, carriers are struggling to negotiate load-by-load rate increases that fully offset the higher prices for diesel. “Capacity is tightening. It is putting a floor on rates that we’ve not seen in many years,” Croke said. “I suspect as you get into the spring building, construction and nursery season volume bump, you’ll see rates start to move up again.” CDLs culled in California Adding to the tightening capacity is the US Department of Transportation’s crackdown on non-domiciled CDLs while toughening standards around the English language proficiency of all drivers. The Federal Motor Carrier Safety Administration (FMCSA) has canceled an estimated 13,000 CDLs in California. Raman Dillon, president of the 2,000- member North American Punjabi Trucking Association, said the loss of those drivers and high diesel prices will continue to tighten capacity in the state. “The drivers are suffering and the impact on the public and the supply chain has yet to be seen,” Dillon told the Journal of Commerce. “These CDLs were not picked up at a convenience store, they were issued by the government. You cannot say that every one of the 13,000 drivers they took out is a bad driver... “We feel like we are being made scapegoats, but it will tighten capacity, because our industry has a shortage of good drivers,” he added. Dillon agreed with Croke that high diesel prices will push drivers to the sidelines, at least for the time being, tightening capacity and impacting shippers by making it more costly and harder to find dependable ways to more freight. “We have diesel in some places being sold for seven dollars or more a gallon, and that’s a surcharge that you and me, we’re going to pay,” he said. “Everything is going to get more expensive.” Legislation making its way through Congress , meanwhile, contains several provisions that go far beyond the scope of the FMCSA’s rule restricting non-domiciled CDLs, which the agency estimates could remove up to 194,000 drivers from the market over five years. Still, the trucking industry is split on whether the federal regulations will significantly impact trucking and drayage capacity amid the more than four-year freight recession. Contact Dan Ronan at contactdanronan@gmail.com.

Trucking News

Truckload

Surface

Diesel shock puts floor under trucking rates as demand shows some life

<div class="phx-topic abstract-wrapper">TotalEnergies accepted a $1 billion payment from the Trump administration to walk away from two offshore wind projects and instead reinvest the funds in fossil fuel projects along the Gulf Coast.</div>

TotalEnergies accepted a $1 billion payment from the Trump administration to walk away from two offshore wind projects and instead reinvest the funds in fossil fuel projects along the Gulf Coast.

<div class="phx-topic">The cancellation of a pair of US offshore wind projects in exchange for a $1 billion payment from the Trump administration is the latest development to chip away at renewable project cargo opportunities. But the deal could potentially drive cargo for fossil fuel projects. French energy giant TotalEnergies signed off on a March 23 agreement to accept $1 billion from the US government to give up the leases on its two offshore wind projects — Carolina Long Bay and New York Bight — and instead pivot to the buildout of gas and power production and export facilities in the US. “Considering that the development of offshore wind projects is not in the country’s interest, we have decided to renounce offshore wind development in the United States in exchange for the reimbursement of the lease fees,” TotalEnergies chairman and CEO Patrick Pouyanné said in a statement. US offshore wind projects have come under attack by President Donald Trump, who issued an executive order banning new wind power projects upon taking office in January 2025. In December, the administration’s Bureau of Ocean Energy Management (BOEM) issued stop-work orders on five East Coast offshore wind projects that are fully permitted and over halfway complete. The TotalEnergies projects were not among the five. The payout to TotalEnergies comes after the administration <a href="https://www.joc.com/article/trump-administration-seeks-to-undo-court-rulings-favoring-offshore-wind-projects-6173748">began taking steps to reverse a sweep of recent court victories</a> for the five offshore wind projects as developers rush to complete work on the projects after courts allowed work to resume. Sam Salustro, senior vice president of policy and market affairs for industry group Oceantic Network, told the Journal of Commerce that TotalEnergies’ projects were still in the pre-environmental review phase when project cargo and logistics activity is limited. “These two projects were not well advanced in the development or permitting pipeline, so impacts stemming directly from this would be negligible,” he said. Salustro said that despite the project cancellations, the long-term trajectory of the US offshore wind industry remains secure because states continue to rely on wind as a foundational power source amid rapidly rising energy demands. “This is political theater meant to obscure the fact that offshore wind capacity is being pulled out of the pipeline when energy prices are skyrocketing, even as other offshore wind projects continue delivering reliable and affordable power to the grid,” he said. Under the agreement, TotalEnergies will reinvest the refunded lease fees to finance the construction of NextDecade Corp.’s Rio Grande liquefied natural gas (LNG) plant under way near Brownsville, Texas, and to support the development of other US gas production and export projects. TotalEnergies’ energy pivot comes at a time when LNG export capacity in the US, which is already the world’s largest LNG exporter, <a href="https://www.joc.com/article/lng-project-cargo-poised-for-us-boom-amid-war-6185867">is expected to nearly double in the next five years</a>, according to recent analyses by the US Energy Information Administration (EIA). <h3>Wind cargo shifting to Canada </h3>For facilities like the Port of Vancouver USA in Washington state, project cargo movement has been reflecting the move away from wind energy in the US. Alex Strogen, the port’s chief commercial officer, told the Journal of Commerce that he’s observed more wind cargo moving to Canada because of the falloff in US wind projects. “This is a shift that we’ve seen gaining momentum for the past three or four years,” he said. From a ports perspective, policies under Trump and former President Joe Biden have made wind farm installations more expensive, Strogen said. He cited Biden’s Inflation Reduction Act incentivizing manufacturers to move production to the US — creating short-term capital expenses while domestic supply chains were gaining their footing — and Trump’s push to dial back permits for wind farms on federal lands. Because Canadian ports don’t have the infrastructure in place to move massive wind turbine components, one silver lining for US facilities like the Port of Vancouver is that they have been able to capture some of Canada’s wind project cargo business. “The Port of Vancouver and the Port of Longview (Washington) have been taking advantage of the falloff of US wind projects and capitalizing on the relatively steady demand for wind farms going up historically in Alberta and Saskatchewan, and now we are seeing a shift into British Columbia as well,” Strogen said. Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com.</a></div>

The cancellation of a pair of US offshore wind projects in exchange for a $1 billion payment from the Trump administration is the latest development to chip away at renewable project cargo opportunities. But the deal could potentially drive cargo for fossil fuel projects. French energy giant TotalEnergies signed off on a March 23 agreement to accept $1 billion from the US government to give up the leases on its two offshore wind projects — Carolina Long Bay and New York Bight — and instead pivot to the buildout of gas and power production and export facilities in the US. “Considering that the development of offshore wind projects is not in the country’s interest, we have decided to renounce offshore wind development in the United States in exchange for the reimbursement of the lease fees,” TotalEnergies chairman and CEO Patrick Pouyanné said in a statement. US offshore wind projects have come under attack by President Donald Trump, who issued an executive order banning new wind power projects upon taking office in January 2025. In December, the administration’s Bureau of Ocean Energy Management (BOEM) issued stop-work orders on five East Coast offshore wind projects that are fully permitted and over halfway complete. The TotalEnergies projects were not among the five. The payout to TotalEnergies comes after the administration began taking steps to reverse a sweep of recent court victories for the five offshore wind projects as developers rush to complete work on the projects after courts allowed work to resume. Sam Salustro, senior vice president of policy and market affairs for industry group Oceantic Network, told the Journal of Commerce that TotalEnergies’ projects were still in the pre-environmental review phase when project cargo and logistics activity is limited. “These two projects were not well advanced in the development or permitting pipeline, so impacts stemming directly from this would be negligible,” he said. Salustro said that despite the project cancellations, the long-term trajectory of the US offshore wind industry remains secure because states continue to rely on wind as a foundational power source amid rapidly rising energy demands. “This is political theater meant to obscure the fact that offshore wind capacity is being pulled out of the pipeline when energy prices are skyrocketing, even as other offshore wind projects continue delivering reliable and affordable power to the grid,” he said. Under the agreement, TotalEnergies will reinvest the refunded lease fees to finance the construction of NextDecade Corp.’s Rio Grande liquefied natural gas (LNG) plant under way near Brownsville, Texas, and to support the development of other US gas production and export projects. TotalEnergies’ energy pivot comes at a time when LNG export capacity in the US, which is already the world’s largest LNG exporter, is expected to nearly double in the next five years , according to recent analyses by the US Energy Information Administration (EIA). Wind cargo shifting to Canada For facilities like the Port of Vancouver USA in Washington state, project cargo movement has been reflecting the move away from wind energy in the US. Alex Strogen, the port’s chief commercial officer, told the Journal of Commerce that he’s observed more wind cargo moving to Canada because of the falloff in US wind projects. “This is a shift that we’ve seen gaining momentum for the past three or four years,” he said. From a ports perspective, policies under Trump and former President Joe Biden have made wind farm installations more expensive, Strogen said. He cited Biden’s Inflation Reduction Act incentivizing manufacturers to move production to the US — creating short-term capital expenses while domestic supply chains were gaining their footing — and Trump’s push to dial back permits for wind farms on federal lands. Because Canadian ports don’t have the infrastructure in place to move massive wind turbine components, one silver lining for US facilities like the Port of Vancouver is that they have been able to capture some of Canada’s wind project cargo business. “The Port of Vancouver and the Port of Longview (Washington) have been taking advantage of the falloff of US wind projects and capitalizing on the relatively steady demand for wind farms going up historically in Alberta and Saskatchewan, and now we are seeing a shift into British Columbia as well,” Strogen said. Contact Autumn Cafiero Giusti at autumn@autumngiusti.com.

Energy projects

Project cargo

Breakbulk News

Offshore wind cancellations set up energy project pivot in the US

<div class="phx-topic abstract-wrapper">Ocean carriers have a stronger financial backstop than past downcycles after having retired significant debt and increased their profitability in the last five years post-pandemic, writes Executive Editor Mark Szakonyi.</div>

Ocean carriers have a stronger financial backstop than past downcycles after having retired significant debt and increased their profitability in the last five years post-pandemic, writes Executive Editor Mark Szakonyi.

<div class="phx-topic">This container shipping downcycle is shaping up to be “shallow,” and there’s an argument to be made that so-called ship overordering may be prudent in the long-term despite overcapacity rising over the next few years. Most immediately, ocean carriers have a stronger financial backstop than past downcycles, having retired significant debt after reaping $600 billion in operating profits from 2021-2024, said Rahul Kapoor, S&amp;P’ Global’s global head of shipping and analytics research. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6192742_0.1.jpg"></img></div>Average leverage for the industry, as measured by total debt to earnings before interest and taxes (EBIT), was a mere 1 to 2% between 2021-2025. Comparatively, the average leverage was in the range of 7 to 8% in 2012-2020. “When we look at the industry and when we look at this downturn which we are talking about, I think the industry is very well-prepared, and we have to look at that when we're talking about the container shipping downcycle which is going to come,” Kapoor said March 2 at the Journal of Commerce’s TPM26 conference in Long Beach. “So in our view, it's a shallow cycle.” Beyond driving record profits for the industry, the disruption during the pandemic set carriers on a more profitable course, recording EBIT margins of 21 to 22% in 2021-2025, compared to EBIT in the range of just 2 to 3% in the nine prior years, he said. The data is based only on carriers that report earnings, and thus excludes Mediterranean Shipping Co. Kapoor said he expected the container shipping industry to report losses over the next two or three years. Profitability is already falling. The average operating profit of major carriers fell to 5.3% for the fourth quarter of 2025 and was the first quarterly operating loss since the first quarter of 2024, according to analyst Alphaliner. But while overcapacity will pull balance sheets into the red in the coming years, container ship orders, representing more than one-third of the existing fleet, are a better bet than they appear, Kapoor said. In a capital-intensive industry, ordering more ships, partly to prepare for tighter decarbonization regulations, makes more sense than returning the profits to shareholders, he said. “Maybe (the industry) went a bit overboard. It always does. But the balance sheets are strong,” Kapoor said. “The cash buffers are extremely strong, and the windfall profits the industry saw were better utilized.” <h3>Why this order cycle is different </h3>Since 2020, there’s been two waves of ship orders, with the first between 2021-2024 being driven by record profits tied to pandemic-era disruption “They were all building and forming a long conga line with a glass of champagne in their hand, and they ordered,” Jan Tiedemann, senior analyst at Alphaliner, said at TPM26. “But now there's a second ordering wave going on. We have to think about why that is happening because this one is clearly deliberate, and it also focuses on more and smaller ships.” Whereas the first wave of orders centered on ships with capacities of up to 24,000 TEUs, the second wave is dominated by orders of small ships with capacities under 6,000 TEUs. Non-operating common carriers are also driving the ordering of small ships. ”Since roughly 2005, if you look at the fleet and the fleet growth over these 20 years, it’s gone up in an almost linear way,” Tiedemann said. “It’s 1 million (TEUs) added year-in, year-out, and it’s almost stable.” Industry consolidation, with the top 10 carriers operating 85% of the total fleet compared to 65% a decade ago, and record profits during the pandemic give the major ocean carriers confidence in the long-game, he said. “They understood that the ship is an asset which probably can break even for 10 years of its lifetime, probably can be slightly loss-making for another 10 years of its lifetime, but then makes all its money back in five years,” said Tiedemann. “So you have that asset, and especially in this time of constant disruption, where we're going into a phase, that disruption is the new normal.” Not all container lines were able to capitalize on the disruption caused by diversions away from the Suez Canal starting in late 2023 because they failed to order enough tonnage, Tiedemann said. Carriers without enough tonnage for the longer sailings around the Cape of Good Hope had to turn to more expensive chartering and buying secondhand ships. Simon Heaney, senior manager of container research at Drewry, doesn’t see the massive order book as benign as others. Betting on a ‘black swan’ event to cause disruption and soak up functional capacity “doesn’t constitute as a plan,” he said. “Also, over-ordering means they are not fully capitalizing on the given situation,” Heaney said. “A smarter bet would have been to limit orders as they would win in any scenario without the expense.” Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a></div>

This container shipping downcycle is shaping up to be “shallow,” and there’s an argument to be made that so-called ship overordering may be prudent in the long-term despite overcapacity rising over the next few years. Most immediately, ocean carriers have a stronger financial backstop than past downcycles, having retired significant debt after reaping $600 billion in operating profits from 2021-2024, said Rahul Kapoor, S&P’ Global’s global head of shipping and analytics research. Average leverage for the industry, as measured by total debt to earnings before interest and taxes (EBIT), was a mere 1 to 2% between 2021-2025. Comparatively, the average leverage was in the range of 7 to 8% in 2012-2020. “When we look at the industry and when we look at this downturn which we are talking about, I think the industry is very well-prepared, and we have to look at that when we're talking about the container shipping downcycle which is going to come,” Kapoor said March 2 at the Journal of Commerce’s TPM26 conference in Long Beach. “So in our view, it's a shallow cycle.” Beyond driving record profits for the industry, the disruption during the pandemic set carriers on a more profitable course, recording EBIT margins of 21 to 22% in 2021-2025, compared to EBIT in the range of just 2 to 3% in the nine prior years, he said. The data is based only on carriers that report earnings, and thus excludes Mediterranean Shipping Co. Kapoor said he expected the container shipping industry to report losses over the next two or three years. Profitability is already falling. The average operating profit of major carriers fell to 5.3% for the fourth quarter of 2025 and was the first quarterly operating loss since the first quarter of 2024, according to analyst Alphaliner. But while overcapacity will pull balance sheets into the red in the coming years, container ship orders, representing more than one-third of the existing fleet, are a better bet than they appear, Kapoor said. In a capital-intensive industry, ordering more ships, partly to prepare for tighter decarbonization regulations, makes more sense than returning the profits to shareholders, he said. “Maybe (the industry) went a bit overboard. It always does. But the balance sheets are strong,” Kapoor said. “The cash buffers are extremely strong, and the windfall profits the industry saw were better utilized.” Why this order cycle is different Since 2020, there’s been two waves of ship orders, with the first between 2021-2024 being driven by record profits tied to pandemic-era disruption “They were all building and forming a long conga line with a glass of champagne in their hand, and they ordered,” Jan Tiedemann, senior analyst at Alphaliner, said at TPM26. “But now there's a second ordering wave going on. We have to think about why that is happening because this one is clearly deliberate, and it also focuses on more and smaller ships.” Whereas the first wave of orders centered on ships with capacities of up to 24,000 TEUs, the second wave is dominated by orders of small ships with capacities under 6,000 TEUs. Non-operating common carriers are also driving the ordering of small ships. ”Since roughly 2005, if you look at the fleet and the fleet growth over these 20 years, it’s gone up in an almost linear way,” Tiedemann said. “It’s 1 million (TEUs) added year-in, year-out, and it’s almost stable.” Industry consolidation, with the top 10 carriers operating 85% of the total fleet compared to 65% a decade ago, and record profits during the pandemic give the major ocean carriers confidence in the long-game, he said. “They understood that the ship is an asset which probably can break even for 10 years of its lifetime, probably can be slightly loss-making for another 10 years of its lifetime, but then makes all its money back in five years,” said Tiedemann. “So you have that asset, and especially in this time of constant disruption, where we're going into a phase, that disruption is the new normal.” Not all container lines were able to capitalize on the disruption caused by diversions away from the Suez Canal starting in late 2023 because they failed to order enough tonnage, Tiedemann said. Carriers without enough tonnage for the longer sailings around the Cape of Good Hope had to turn to more expensive chartering and buying secondhand ships. Simon Heaney, senior manager of container research at Drewry, doesn’t see the massive order book as benign as others. Betting on a ‘black swan’ event to cause disruption and soak up functional capacity “doesn’t constitute as a plan,” he said. “Also, over-ordering means they are not fully capitalizing on the given situation,” Heaney said. “A smarter bet would have been to limit orders as they would win in any scenario without the expense.” Contact Mark Szakonyi at  mark.szakonyi@spglobal.com

Container lines

Maritime

Container shipping faces ‘shallow’ downcycle amid strong carrier finances

<div class="phx-topic abstract-wrapper">The Iran-driven fuel spike has created the widest intermodal cost advantage in years, but capturing it — and keeping it — requires something railroads have rarely practiced: orchestrated intermodal, writes Paul Tonsager.</div>

The Iran-driven fuel spike has created the widest intermodal cost advantage in years, but capturing it — and keeping it — requires something railroads have rarely practiced: orchestrated intermodal, writes Paul Tonsager.

<div class="phx-topic">Gulf Coast diesel hit $5.13 per gallon for the week ending March 23 — up 30 cents in a single week and still the cheapest regional price in the country, according to government data. East Coast truckers are paying $5.48; California operators are staring at $6.87. For long-haul carriers already squeezed by two years of overcapacity and compressed margins, the Middle East conflict’s disruption to Strait of Hormuz crude flows has turned a manageable cost structure into a cash hemorrhage. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6192409_0.1.jpg"></img></div>For railroads and intermodal marketing companies (IMCs), this is the moment they have been waiting for since freight markets went soft in 2023. The fuel efficiency advantage of rail is not new. Most beneficial cargo owners (BCOs) have already run the numbers — and until now, trucking won. What is new is that the price spread has widened to the point where the math is changing answers that shippers thought were settled. That question is the gift. Namely, what railroads do with it — and what their entire partner network does with it — determines whether the next 12 months represent a lasting franchise expansion or another cycle of mode-shift freight that returns to trucks the moment diesel retreats. <h3>Sell the network, not the lane </h3>When a shipper calls because diesel just hit $5 per gallon, the instinct is to quote the lane they asked about and close the booking. That is the wrong move. A shipper under fuel pressure is not just repricing one lane — they are repricing their entire transportation wallet. Railroads and IMCs that arrive with a network proposal — (“here is your freight portfolio across high-density corridors, here is the landed cost comparison across your full book”) — will capture meaningful wallet share, not just the lane that prompted the call. The shipper asking about Chicago-to-Dallas may have 10 corridors where intermodal is now the better economic answer. Sell the lane and you win the booking. Sell the network and you win the account. <h3>Orchestrated intermodal </h3>Here is the part most railroads get wrong even when the commercial conversation goes well: The railroad cannot retain the shipper alone — and when it was talking to the shipper directly, it was a strategy call, not the day-to-day operational relationship that actually creates loyalty. To the BCO, the underlying carriers — the steamship line, the dray operator, the chassis pool — are largely unknown. The IMC is the only throat to choke. When something breaks, that call goes to the IMC. And if the IMC can’t fix it, the freight goes back to trucking. But here is the structural reality: Railroads have largely ceded the BCO relationship to their wholesale partners — the steamship lines and IMCs who hold the direct commercial connection to the cargo owner. That is not a failure; it is the model. The liner and the IMC own the loyalty, the wallet conversation, and the export opportunity as BCOs move polyethylene and other commodities into Atlantic markets. The railroad’s job is not to reclaim that relationship — it is to make its wholesale partners effective enough orchestrators that the freight stays on rail. That means investing in the partners, not competing with them. Shared visibility tools. Service commitments at the account level, not just the corridor level. Chassis and terminal performance the IMC can actually promise a BCO without hedging. Winning this window — and I borrow that term from tech, where timing a market shift is the whole game — requires the railroad to function as the backbone of orchestrated intermodal, enabling the steamship lines and IMCs who own the customer to deliver on the promise. <h3>Is your tech stack ready to orchestrate? </h3>That is the question every railroad and IMC should be asking because orchestrated intermodal is not a commercial concept; it is a technology commitment. Can you see the dray carrier’s ETA in real time, or are you still making phone calls? Is chassis pool visibility live, or a spreadsheet updated twice a day? Is terminal dwell data current enough to intervene before a shipper’s container becomes a problem? Can your systems flag new conversion accounts showing stress signals before the shipper calls their broker? Orchestration requires account-level visibility — knowing that this shipper’s container, on this lane, with this dray partner, is at risk right now. The technology exists: visibility platforms, AI-driven exception management, connected partner APIs. The question is whether a diesel spike is finally the urgency that accelerates the investment. Show up with a rate sheet but not a visibility platform and you win the booking and lose the account. Show up with both and you build something that outlasts the fuel cycle. The diesel spike hands railroads the invitation. Orchestrating the entire service chain — and the technology behind it — to deliver on it is entirely up to them. Paul Tonsager is founder and principal of IMS Advisory and writes the Signals &amp; Switches newsletter on freight strategy at aet1998.substack.com. Contact him at <a href="mailto:paul.tonsager@multimodalsolutions.io">paul.tonsager@multimodalsolutions.io</a>.</div>

Gulf Coast diesel hit $5.13 per gallon for the week ending March 23 — up 30 cents in a single week and still the cheapest regional price in the country, according to government data. East Coast truckers are paying $5.48; California operators are staring at $6.87. For long-haul carriers already squeezed by two years of overcapacity and compressed margins, the Middle East conflict’s disruption to Strait of Hormuz crude flows has turned a manageable cost structure into a cash hemorrhage. For railroads and intermodal marketing companies (IMCs), this is the moment they have been waiting for since freight markets went soft in 2023. The fuel efficiency advantage of rail is not new. Most beneficial cargo owners (BCOs) have already run the numbers — and until now, trucking won. What is new is that the price spread has widened to the point where the math is changing answers that shippers thought were settled. That question is the gift. Namely, what railroads do with it — and what their entire partner network does with it — determines whether the next 12 months represent a lasting franchise expansion or another cycle of mode-shift freight that returns to trucks the moment diesel retreats. Sell the network, not the lane When a shipper calls because diesel just hit $5 per gallon, the instinct is to quote the lane they asked about and close the booking. That is the wrong move. A shipper under fuel pressure is not just repricing one lane — they are repricing their entire transportation wallet. Railroads and IMCs that arrive with a network proposal — (“here is your freight portfolio across high-density corridors, here is the landed cost comparison across your full book”) — will capture meaningful wallet share, not just the lane that prompted the call. The shipper asking about Chicago-to-Dallas may have 10 corridors where intermodal is now the better economic answer. Sell the lane and you win the booking. Sell the network and you win the account. Orchestrated intermodal Here is the part most railroads get wrong even when the commercial conversation goes well: The railroad cannot retain the shipper alone — and when it was talking to the shipper directly, it was a strategy call, not the day-to-day operational relationship that actually creates loyalty. To the BCO, the underlying carriers — the steamship line, the dray operator, the chassis pool — are largely unknown. The IMC is the only throat to choke. When something breaks, that call goes to the IMC. And if the IMC can’t fix it, the freight goes back to trucking. But here is the structural reality: Railroads have largely ceded the BCO relationship to their wholesale partners — the steamship lines and IMCs who hold the direct commercial connection to the cargo owner. That is not a failure; it is the model. The liner and the IMC own the loyalty, the wallet conversation, and the export opportunity as BCOs move polyethylene and other commodities into Atlantic markets. The railroad’s job is not to reclaim that relationship — it is to make its wholesale partners effective enough orchestrators that the freight stays on rail. That means investing in the partners, not competing with them. Shared visibility tools. Service commitments at the account level, not just the corridor level. Chassis and terminal performance the IMC can actually promise a BCO without hedging. Winning this window — and I borrow that term from tech, where timing a market shift is the whole game — requires the railroad to function as the backbone of orchestrated intermodal, enabling the steamship lines and IMCs who own the customer to deliver on the promise. Is your tech stack ready to orchestrate? That is the question every railroad and IMC should be asking because orchestrated intermodal is not a commercial concept; it is a technology commitment. Can you see the dray carrier’s ETA in real time, or are you still making phone calls? Is chassis pool visibility live, or a spreadsheet updated twice a day? Is terminal dwell data current enough to intervene before a shipper’s container becomes a problem? Can your systems flag new conversion accounts showing stress signals before the shipper calls their broker? Orchestration requires account-level visibility — knowing that this shipper’s container, on this lane, with this dray partner, is at risk right now. The technology exists: visibility platforms, AI-driven exception management, connected partner APIs. The question is whether a diesel spike is finally the urgency that accelerates the investment. Show up with a rate sheet but not a visibility platform and you win the booking and lose the account. Show up with both and you build something that outlasts the fuel cycle. The diesel spike hands railroads the invitation. Orchestrating the entire service chain — and the technology behind it — to deliver on it is entirely up to them. Paul Tonsager is founder and principal of IMS Advisory and writes the Signals & Switches newsletter on freight strategy at aet1998.substack.com. Contact him at paul.tonsager@multimodalsolutions.io .

North-American rail

International rail

War hands railroads the ‘gift’ of higher diesel prices

<div class="phx-topic abstract-wrapper">Union Pacific for the second time in five weeks is resetting freight-all-kinds rates on key lanes for rail-owned boxes used by intermodal marketing companies.</div>

Union Pacific for the second time in five weeks is resetting freight-all-kinds rates on key lanes for rail-owned boxes used by intermodal marketing companies.

<div class="phx-topic">Union Pacific Railroad (UP) on Tuesday adjusted rates for rail-owned boxes used by intermodal marketing companies (IMCs), the second such move in the last five weeks amid a widening gap between the truckload spot market and domestic intermodal rates. The pricing adjustments, which go into effect April 1, cover freight-all-kinds (FAK) rates on nearly 30 lanes on so-called EMP boxes and UMAX boxes which interchange with Norfolk Southern and CSX, respectively. About half of the adjustments seek a rate increase, ranging from 1.6% to 14.8%, while the other half actually lower rates between 1.2% and 29%. The moves come as current truckload spot rates have soared since the start of 2026, up between 15% and 20% year over year, according to DAT Freight &amp; Analytics. UP is eyeing an opportunity to win back cargo that can flex between domestic intermodal and truckload as truckload spot rates rise. Truckload contract rates have risen by the low single digits thus far in 2026, due in part to tightening capacity from US regulatory scrutiny over non-domiciled and non-English language proficient drivers, and the lingering effects of weather disruptions from February. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9f53592f-fdc6-46d3-b392-18fdccf441fe"></dynamic-object></div>A big jump in diesel prices due to the war in the Middle East has also pushed truckload carriers to raise all-in spot rates as they attempt to recapture an unexpected operational cost, while the increased cost of diesel is captured through fuel surcharges on contract rates. Those dynamics present an opportunity for railroads to recapture volume lost to truckload as the full truckload market navigated three years of low pricing, inducing shippers to move cargo to truckload. Even before the recent jump in diesel prices, the spread between spot truckload and spot intermodal rates was widening, with the gap at 68 cents in February, according to the Journal of Commerce’s Intermodal Savings Index. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>.</div>

Union Pacific Railroad (UP) on Tuesday adjusted rates for rail-owned boxes used by intermodal marketing companies (IMCs), the second such move in the last five weeks amid a widening gap between the truckload spot market and domestic intermodal rates. The pricing adjustments, which go into effect April 1, cover freight-all-kinds (FAK) rates on nearly 30 lanes on so-called EMP boxes and UMAX boxes which interchange with Norfolk Southern and CSX, respectively. About half of the adjustments seek a rate increase, ranging from 1.6% to 14.8%, while the other half actually lower rates between 1.2% and 29%. The moves come as current truckload spot rates have soared since the start of 2026, up between 15% and 20% year over year, according to DAT Freight & Analytics. UP is eyeing an opportunity to win back cargo that can flex between domestic intermodal and truckload as truckload spot rates rise. Truckload contract rates have risen by the low single digits thus far in 2026, due in part to tightening capacity from US regulatory scrutiny over non-domiciled and non-English language proficient drivers, and the lingering effects of weather disruptions from February. A big jump in diesel prices due to the war in the Middle East has also pushed truckload carriers to raise all-in spot rates as they attempt to recapture an unexpected operational cost, while the increased cost of diesel is captured through fuel surcharges on contract rates. Those dynamics present an opportunity for railroads to recapture volume lost to truckload as the full truckload market navigated three years of low pricing, inducing shippers to move cargo to truckload. Even before the recent jump in diesel prices, the spread between spot truckload and spot intermodal rates was widening, with the gap at 68 cents in February, according to the Journal of Commerce’s Intermodal Savings Index. Contact Eric Johnson at eric.johnson@spglobal.com .

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UP adjusts intermodal pricing to win back volume as truckload rates climb

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