<div class="phx-topic abstract-wrapper">Iran Proposes to Swap Oil for Argentine BeefBUENOS AIRES, Argentina - Leading private export</div>

Iran Proposes to Swap Oil for Argentine BeefBUENOS AIRES, Argentina - Leading private export

<div>Iran Proposes to SwapOil for Argentine BeefBUENOS AIRES, Argentina - Leading private exporters in Argentina are analyzing a recent proposal by Iran to trade 2,000 metric tons a month of fresh Argentine beef for Iranian crude oil.They said Iran had indicated it would not renew an existing open letter of credit with certain unnamed West German banks to cover new Argentine beef purchases after ongoing negotiations are concluded for 4,000 metric tons of beef.Kuwait Won't InterfereWith Running of BPLONDON - A Kuwaiti official said Kuwait will not seek to interfere with the operation of British Petroleum Co. PLC, in which...

Iran Proposes to Swap Oil for Argentine BeefBUENOS AIRES, Argentina - Leading private exporters in Argentina are analyzing a recent proposal by Iran to trade 2,000 metric tons a month of fresh Argentine beef for Iranian crude oil. They said Iran had indicated it would not renew an existing open letter of credit with certain unnamed West German banks to cover new Argentine beef purchases after ongoing negotiations are concluded for 4,000 metric tons of beef. Kuwait Won't Interfere With Running of BP LONDON - A Kuwaiti official said Kuwait will not seek to interfere with the operation of British Petroleum Co. PLC, in which it has built up a 20 percent interest, the London Times reported Monday. Kuwaiti Oil Minister Ali Khalifa al-Sabah told the Gulf Center for Strategic Studies here that the stake had been acquired as a long-term investment, the newspaper said. He denied suggestions that the British government had asked Kuwait to rescue the company after the public sale of its own 31.5 percent holding, which coincided with the October stock market crash. Pauley Plans to Buy Fletcher Oil & Refining LOS ANGELES - Pauley Petroleum announced Monday that it plans to acquire Fletcher Oil & Refining Co. Fletcher owns and operates a 30,000-barrel-a-day refinery in the Long Beach, Calif., area and has been operating under Chapter 11 of the federal Bankruptcy Code. The Federal Bankruptcy Court in Los Angeles approved a plan of reorganization, allowing Pauley's acquisition of Fletcher to be effective when the court's order becomes final on March 1.

ENERGY BRIEFS

<div class="phx-topic abstract-wrapper">But court filings show that even after restructuring, the company is likely to operate with thin margins and a relatively modest cash cushion. </div>

But court filings show that even after restructuring, the company is likely to operate with thin margins and a relatively modest cash cushion.

Feature image

<div class="phx-topic">STG Logistics has won court approval to emerge from Chapter 11 bankruptcy in the coming weeks, clearing the way for a reorganization that will eliminate more than $1 billion in debt and close the legal battle that has hung over the transloading, drayage and intermodal provider since January. The plan, approved Monday by the US Bankruptcy Court for the District of New Jersey, also releases the final $25 million of a previously committed $150 million capital infusion. Ownership of the reorganized company will go to a lender group led by affiliates of Fortress Investment Group, Fidelity Management &amp; Research Company, and Invesco Senior Secured Management. “[This] puts our company on a clear path to emerge from Chapter 11 with a strong financial foundation and significantly deleveraged capital structure,” STG’s CEO Geoff Anderman said in a statement. The company has benefited from a rebound in domestic rail volumes after nearly four years of weak demand, which will stabilize the business after financial pressures pushed it into bankruptcy earlier this year. That rebound included an <a href="https://www.joc.com/article/soaring-truck-rates-power-major-rebound-in-domestic-intermodal-volume-6208736">unusually strong March</a> in which railroads hauled the third-most domestic containers ever, according to the Intermodal Association of North America. STG has been able to grow its business out of Southern California on a year-over-year basis, according to visibility provider RailState, although the exact figures are estimates. For intermodal, the biggest operating detail is the container fleet. STG reached an agreement to restructure leases on 11,500 of its 15,000 containers, allowing it to avoid selling equipment as part of the bankruptcy process. <h3>Revenue projected to rise at 6.9% CAGR through 2030 </h3>Court filings show that even after restructuring, STG is likely to operate with thin margins and a relatively modest cash cushion. The company expects revenue to rise at a 6.9% compound annual growth rate through 2030, according to a filing with the bankruptcy court. Even so, it projects earnings before interest, taxes, depreciation and amortization (EBITA) of only about 4% of revenue, a relatively thin margin. By comparison, J.B. Hunt Transport Services and Schneider National, who also handle intermodal, transloading and drayage, posted companywide first-quarter EBITDA margins of roughly 10% to 13%. STG’s projected cash balance is stronger than in January, but remains tight. The company had about $37 million in cash when it filed for Chapter 11 in January, below the roughly $50 million threshold its advisers said was needed to cover about two weeks of operations. That threshold came from STG’s old debt agreements and will no longer apply after bankruptcy. Even so, projected cash on hand of $66 million in 2026, rising to an expected $85 million by 2030, suggests the company will still have a limited cushion. That will still leave STG exposed to swings in freight demand, insurance claims, and service disruptions in a highly cyclical businesses. Schneider, by comparison, ended the first quarter of 2026 with $227.8 million in cash on hand. For now, STG has bought itself time, a cleaner balance sheet and the backing of large financial institutions. Whether that amounts to a permanent resurgence rather than a temporary reprieve will depend on how much demand there is for intermodal, transloading, warehousing, and drayage in the coming years. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

STG Logistics has won court approval to emerge from Chapter 11 bankruptcy in the coming weeks, clearing the way for a reorganization that will eliminate more than $1 billion in debt and close the legal battle that has hung over the transloading, drayage and intermodal provider since January. The plan, approved Monday by the US Bankruptcy Court for the District of New Jersey, also releases the final $25 million of a previously committed $150 million capital infusion. Ownership of the reorganized company will go to a lender group led by affiliates of Fortress Investment Group, Fidelity Management & Research Company, and Invesco Senior Secured Management. “[This] puts our company on a clear path to emerge from Chapter 11 with a strong financial foundation and significantly deleveraged capital structure,” STG’s CEO Geoff Anderman said in a statement. The company has benefited from a rebound in domestic rail volumes after nearly four years of weak demand, which will stabilize the business after financial pressures pushed it into bankruptcy earlier this year. That rebound included an unusually strong March in which railroads hauled the third-most domestic containers ever, according to the Intermodal Association of North America. STG has been able to grow its business out of Southern California on a year-over-year basis, according to visibility provider RailState, although the exact figures are estimates. For intermodal, the biggest operating detail is the container fleet. STG reached an agreement to restructure leases on 11,500 of its 15,000 containers, allowing it to avoid selling equipment as part of the bankruptcy process. Revenue projected to rise at 6.9% CAGR through 2030 Court filings show that even after restructuring, STG is likely to operate with thin margins and a relatively modest cash cushion. The company expects revenue to rise at a 6.9% compound annual growth rate through 2030, according to a filing with the bankruptcy court. Even so, it projects earnings before interest, taxes, depreciation and amortization (EBITA) of only about 4% of revenue, a relatively thin margin. By comparison, J.B. Hunt Transport Services and Schneider National, who also handle intermodal, transloading and drayage, posted companywide first-quarter EBITDA margins of roughly 10% to 13%. STG’s projected cash balance is stronger than in January, but remains tight. The company had about $37 million in cash when it filed for Chapter 11 in January, below the roughly $50 million threshold its advisers said was needed to cover about two weeks of operations. That threshold came from STG’s old debt agreements and will no longer apply after bankruptcy. Even so, projected cash on hand of $66 million in 2026, rising to an expected $85 million by 2030, suggests the company will still have a limited cushion. That will still leave STG exposed to swings in freight demand, insurance claims, and service disruptions in a highly cyclical businesses. Schneider, by comparison, ended the first quarter of 2026 with $227.8 million in cash on hand. For now, STG has bought itself time, a cleaner balance sheet and the backing of large financial institutions. Whether that amounts to a permanent resurgence rather than a temporary reprieve will depend on how much demand there is for intermodal, transloading, warehousing, and drayage in the coming years. Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

North-American rail

Intermodal providers

Surface

Bankruptcy court approves STG Logistics’ exit from Chapter 11

<div class="phx-topic abstract-wrapper">The largest forwarding software provider globally adds heft to DCSA’s push to drive electronic standards in the ocean freight industry.</div>

The largest forwarding software provider globally adds heft to DCSA’s push to drive electronic standards in the ocean freight industry.

<div class="phx-topic">WiseTech Global is joining the Digital Container Shipping Association’s (DCSA) partnership program to help drive adoption of digital standards in the ocean freight industry, the two announced Tuesday. Wisetech, provider of the industry’s most widely used forwarding software, becomes the most prominent name in a growing list of technology vendors, consultants, third-party logistics providers, and implementation specialists that are partners with DCSA under its DCSA+ program. “WiseTech has been among the earliest and most active implementers of DCSA standards since 2019, growing into one of the largest users of DCSA-specification carrier [application program interfaces] in the industry,” DCSA said in a statement. DSCA represents most of the world’s top container shipping companies as they collectively push for digital standards to become more engrained in the industry. Its ocean carrier members are Mediterranean Shipping Co., Hapag-Lloyd, Maersk, CMA CGM, Evergreen, HMM, Yang Ming, Zim Integrated Shipping Services, and PIL. More than 90% of the world’s top 3PLs use WiseTech for freight management, accounting, visibility, or customs compliance. The company <a href="https://www.joc.com/article/wisetech-notches-biggest-acquisition-with-21-billion-deal-for-e2open-6011581">acquired E2open</a>, a platform that provides planning and transportation management software to global shippers, in May 2025, meaning it has connectivity to shipper, ocean carrier and forwarder systems and the data that passes between those entities. “Standardized integrations help our customers and their carrier partners to achieve their goals faster and more effectively by removing friction at critical data handover points,” Ashley Skaanild, WiseTech’s principal advisor for carrier integration and transformation, said in the joint statement. The DCSA+ program has seen a number of members join over the past six months, including IKEA, the program’s first shipper, and Unifeeder, bringing the total number of members to 20. Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

WiseTech Global is joining the Digital Container Shipping Association’s (DCSA) partnership program to help drive adoption of digital standards in the ocean freight industry, the two announced Tuesday. Wisetech, provider of the industry’s most widely used forwarding software, becomes the most prominent name in a growing list of technology vendors, consultants, third-party logistics providers, and implementation specialists that are partners with DCSA under its DCSA+ program. “WiseTech has been among the earliest and most active implementers of DCSA standards since 2019, growing into one of the largest users of DCSA-specification carrier [application program interfaces] in the industry,” DCSA said in a statement. DSCA represents most of the world’s top container shipping companies as they collectively push for digital standards to become more engrained in the industry. Its ocean carrier members are Mediterranean Shipping Co., Hapag-Lloyd, Maersk, CMA CGM, Evergreen, HMM, Yang Ming, Zim Integrated Shipping Services, and PIL. More than 90% of the world’s top 3PLs use WiseTech for freight management, accounting, visibility, or customs compliance. The company acquired E2open , a platform that provides planning and transportation management software to global shippers, in May 2025, meaning it has connectivity to shipper, ocean carrier and forwarder systems and the data that passes between those entities. “Standardized integrations help our customers and their carrier partners to achieve their goals faster and more effectively by removing friction at critical data handover points,” Ashley Skaanild, WiseTech’s principal advisor for carrier integration and transformation, said in the joint statement. The DCSA+ program has seen a number of members join over the past six months, including IKEA, the program’s first shipper, and Unifeeder, bringing the total number of members to 20. Contact Eric Johnson at eric.johnson@spglobal.com .

Container lines

Forwarding

Container Shipping News

Maritime

WiseTech joins partner program of container shipping digital standards group

<div class="phx-topic abstract-wrapper">Richard Kloster joins the STB at an important time for the agency as it reviews the proposed $85 billion merger of Union Pacific and Norfolk Southern, which would be the largest US rail transaction in nearly three decades. </div>

Richard Kloster joins the STB at an important time for the agency as it reviews the proposed $85 billion merger of Union Pacific and Norfolk Southern, which would be the largest US rail transaction in nearly three decades.

<div class="phx-topic">The US Senate has confirmed the appointment of Richard Kloster to the Surface Transportation Board, adding a third Republican to the regulatory body as it moves toward a pivotal early decision in Union Pacific Railroad’s proposed $85 billion acquisition of Norfolk Southern Railway. Kloster was approved Monday as part of a broader package of federal nominees that passed by a 46-43 party line vote. He fills the seat vacated by former STB Chairman Martin Oberman, who retired in May 2024. Kloster’s term runs through Dec. 31, 2028. Kloster has extensive experience as a consultant and board member on several transportation groups, including the National Industrial Transportation League and Railway Supply Institute. His confirmation gives Republicans a 3-1 edge on STB. Kloster joins Chairman Patrick Fuchs and Michelle Schultz, both Republicans, and Democrat Karen Hedlund. One seat remains vacant, but the board does not need all five seats filled to conduct business. Kloster joins STB at an important time for the agency as it reviews what would be the largest US rail transaction in nearly three decades. The regulatory body can rule as soon as May 29 on whether UP has submitted a “complete” application for its proposed merger with NS. The board previously <a href="https://www.joc.com/article/stb-rejects-up-ns-merger-application-as-incomplete-6154074">ruled in January</a> that an initial application was “incomplete” and outlined several deficiencies that had to be rectified. UP filed a revised application on April 30. UP and NS argue that their revised application satisfies the STB’s requirements and that the review process should be allowed to continue. But rival railroads BNSF Railway, Canadian Pacific Kansas City, and CSX Transportation have urged the STB to reject the filing again, arguing the second version of the application remains structurally deficient. If the STB deems the second application complete, then the merger proposal can move into a formal review process that would include environmental analysis, public hearings, and broader shipper input. Kloster’s path to the STB was delayed after his nomination failed to reach the Senate floor during the body’s prior session. He was re-nominated in January and advanced to the Senate floor in March on a party line vote. Kloster offered few insights on the UP-NS transaction during his Senate confirmation hearing last fall, saying only he would review the application thoroughly and not take his seat on the STB with a predetermined decision on the proposed merger. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

The US Senate has confirmed the appointment of Richard Kloster to the Surface Transportation Board, adding a third Republican to the regulatory body as it moves toward a pivotal early decision in Union Pacific Railroad’s proposed $85 billion acquisition of Norfolk Southern Railway. Kloster was approved Monday as part of a broader package of federal nominees that passed by a 46-43 party line vote. He fills the seat vacated by former STB Chairman Martin Oberman, who retired in May 2024. Kloster’s term runs through Dec. 31, 2028. Kloster has extensive experience as a consultant and board member on several transportation groups, including the National Industrial Transportation League and Railway Supply Institute. His confirmation gives Republicans a 3-1 edge on STB. Kloster joins Chairman Patrick Fuchs and Michelle Schultz, both Republicans, and Democrat Karen Hedlund. One seat remains vacant, but the board does not need all five seats filled to conduct business. Kloster joins STB at an important time for the agency as it reviews what would be the largest US rail transaction in nearly three decades. The regulatory body can rule as soon as May 29 on whether UP has submitted a “complete” application for its proposed merger with NS. The board previously ruled in January that an initial application was “incomplete” and outlined several deficiencies that had to be rectified. UP filed a revised application on April 30. UP and NS argue that their revised application satisfies the STB’s requirements and that the review process should be allowed to continue. But rival railroads BNSF Railway, Canadian Pacific Kansas City, and CSX Transportation have urged the STB to reject the filing again, arguing the second version of the application remains structurally deficient. If the STB deems the second application complete, then the merger proposal can move into a formal review process that would include environmental analysis, public hearings, and broader shipper input. Kloster’s path to the STB was delayed after his nomination failed to reach the Senate floor during the body’s prior session. He was re-nominated in January and advanced to the Senate floor in March on a party line vote. Kloster offered few insights on the UP-NS transaction during his Senate confirmation hearing last fall, saying only he would review the application thoroughly and not take his seat on the STB with a predetermined decision on the proposed merger. Contact Ari Ashe at ari.ashe@spglobal.com .

Senate approves Kloster for seat on Surface Transportation Board

<div class="phx-topic abstract-wrapper">Yet liner executives insist that much of the surplus tonnage can be absorbed by a combination of vessel management, trade imbalances, increased scrapping, and the ongoing effects of geopolitical disruptions.</div>

Yet liner executives insist that much of the surplus tonnage can be absorbed by a combination of vessel management, trade imbalances, increased scrapping, and the ongoing effects of geopolitical disruptions.

<div class="phx-topic">The profitability-sapping effects of vessel overcapacity from an order book closing in on 40% of the in-service fleet were on display in the first quarter when volume gains by some ocean carriers were not enough to prevent a steep drop in earnings. Declining average rates dragged down the <a href="https://www.joc.com/article/maersk-passing-500-million-monthly-fuel-bill-to-customers-in-full-ceo-6216319">first-quarter results of Maersk and HMM</a>, despite solid volume increases; HMM reported a 14% increase in first-quarter volume, while Maersk reported “above market growth” of 9%. And despite stable volumes from other carriers such as <a href="https://www.joc.com/article/hapag-lloyd-posts-q1-net-loss-in-unsatisfactory-start-to-2026-6219964">Hapag-Lloyd</a>, <a href="https://www.joc.com/article/one-expects-11-decline-in-fy26-net-profit-due-to-war-in-middle-east-6212215">Ocean Network Express</a>, <a href="https://www.joc.com/article/lower-freight-rates-hit-q1-revenues-for-taiwans-big-three-carriers-6204140">Evergreen, Yang Ming and OOCL</a>, their revenues were significantly eroded by weaker rates; Hapag even posted a loss in Q1. Yet carrier executives insist that the excess supply can be mitigated and the surplus tonnage absorbed — this year at least — by a combination of vessel management, trade imbalances, the ongoing effects of geopolitical disruption, and an increase in scrapping. Some heavy lifting will be required. Maersk CEO Vincent Clerc put the current excess supply in the market at 1 million to 1.5 million TEUs, with the longer routes around southern Africa absorbing another 2 million TEUs. “So, it's about 3.5 million TEUs overall that is the total capacity overhang to normalized trade routes today,” Clerc said during Maersk’s recent Q1 earnings call with analysts. But he believes excess capacity can be managed by carriers showing discipline in how they deploy capacity, a rise in scrapping and by a new wave of slow steaming that will be triggered by high energy costs. “The deliveries are okay this year, but they are picking up significantly next year, and that’s going to put further pressure on the overhang,” he added. Despite the significant capacity overhang, Clerc believes high energy costs, driven by the effective closure of the Strait of Hormuz amid the ongoing war in the Middle East, will soon trigger a wave of slow steaming that could absorb up to an additional 1.5 million TEUs of capacity. “We’re looking at it ourselves, and the cost benefit is quite compelling,” he said. “But if we don’t pick up scrapping and actually retire some of the ships that have not been retired over the last seven years, this is going to be extremely bumpy.” <h3>Swelling order book </h3>The global order book continues to swell, with total capacity on order currently at 12.3 million TEUs, 37% of the in-service fleet, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. Sea-web data shows just over 1 million TEUs of capacity via ships over 10,000 TEUs is scheduled to be delivered this year, contributing to capacity growth of 4% amid market predictions for demand growth of 2% to 3% this year. Around 2.3 million TEUs of capacity are due for delivery in 2027 and 3.4 million TEUs in 2028. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="4c149ebf-df6c-4535-a9b2-7d12091e03d8"></dynamic-object></div>Rolf Habben Jansen, CEO of Maersk’s Gemini Cooperation partner Hapag-Lloyd, also pointed to vessel management levers such as slow steaming and blank sailings, as well as increased scrapping, to limit the effects of excess tonnage. But he noted that another capacity-absorbing factor was emerging in the form of an imbalance between the dominant trade lanes of head-haul corridors and non-dominant lanes. Habben Jansen said growth on the dominant legs of a trade lane is what drives capacity needs, not the overall market growth, noting that strong growth on dominant trade lanes -- 10% in 2024 and 8% in 2025 -- was helping to offset the impact of new supply on rate levels. “In 2026, the growth on the dominant legs will be higher than the additional supply that comes into the market, acting as a mitigating factor against overcapacity,” he said during Hapag’s earnings call last week. <h3>Supply management to be tested </h3>How demand and rates shape up through the second quarter and peak season will put the capacity-mitigating confidence of carrier executives to the test, particularly on the trans-Pacific. US imports from Asia have fallen 4.6% this year through April, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. Despite the weak demand, carriers on the trans-Pacific are having some success with rate increases amid an environment of sharply higher fuel costs. Platts, a sister company of the Journal of Commerce, believes rates are being supported by blank sailings, smaller vessel deployments and tighter space allocations. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9c18268a-1028-4fd5-916a-6a7afa16d7ec"></dynamic-object></div>Spot rates for Asia to the US West Coast were at $3,200 per FEU as of May 18 — up 84% in two months, according to Platts. East Coast rates were at $4,200/FEU. A series of general rate increases (GRIs) was issued in mid-May, with carriers announcing another set from June 1 as high as $3,000 per FEU, combined with a wave of fuel‑linked surcharge adjustments ranging from $200/FEU to $500/FEU. Asia-Europe volume from Container Trades Statistics is only available for the first quarter, but shows a 13% increase year over year, continuing the strong demand recorded last year when the trade lane grew volume by 8%. Rates have been rising; on Asia-North Europe they are up 17% week on week at $2,800/FEU, with Asia-Mediterranean rates climbing 8% to $4,000/FEU, Platts data shows. The gains appear to be driven by demand and not carrier capacity management, with a significant increase in deployed capacity on Asia-North Europe and a cut in blank sailings. Data from eeSea, part of rate benchmarking platform Xeneta, shows capacity on Asia-North Europe in May will be up 16% from April at 1.2 million TEUs, with blank sailings down 5%. In June, planned capacity will fall to 1.1 million TEUs while planned blank sailings will be halved. It is a more dramatic picture on the trans-Pacific. Asia-US will see 1.96 million TEUs deployed in May, up 4% from April, with blank sailings falling 36%. Planned capacity in June will increase to 2.1 million TEUs while blank sailings will drop by almost 40%. The demand picture for the rest of the year remains unclear. Mediterranean Shipping Co. CEO Soren Toft told the Journal of Commerce in London last week that consumer behavior in both the US and Europe was difficult to predict in the current global economic climate. <h3>Rising energy prices to dampen demand </h3>The International Monetary Fund (IMF) has revised its economic growth forecast downward from 3.3% to 2.8% with the expectation that rising energy prices will dampen demand. At the same time, the war in the Middle East is fueling inflation fears, product shortages and aggressive stockpiling by manufacturers worldwide, according to the GEP Global Supply Chain Volatility Index compiled by S&amp;P Global and released May 12. Businesses globally have ramped up safety stockpiling of goods and raw materials at the fastest rate in three years as they seek to secure supply ahead of further price increases and disruption, the GEP survey found. European manufacturers reported the most aggressive inventory building, signaling heightened concern over supply availability and costs. “Even if tensions in the Middle East ease quickly, global supply chains are unlikely to normalize for another six to 12 months,” John Piatek, vice president of consulting at GEP, said in his analysis of the survey results. “What stands out in April’s data is how broadly the disruption is spreading,” he added. "Shortages worsened across every major region, signaling this is no longer an isolated transport shock. Companies worldwide are now scrambling to secure supply and protect themselves against further inflation and disruption.” A softening of Asian exports because of the stockpiling will likely result in oversupplied carriers rapidly scaling up blank sailings to support rate levels. Maersk and Hapag-Lloyd in March amended their Gemini Cooperation agreement across all global service loops to modify the timing of discussions regarding potential seasonal blank sailings. Under previous terms, the carriers were authorized to blank sailings only during Chinese New Year or Chinese Golden Week, provided such agreement was reached no later than 12 weeks prior to the scheduled date of the sailing. The new agreement allows the carriers to announce blanks six to eight weeks before sailings. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The profitability-sapping effects of vessel overcapacity from an order book closing in on 40% of the in-service fleet were on display in the first quarter when volume gains by some ocean carriers were not enough to prevent a steep drop in earnings. Declining average rates dragged down the first-quarter results of Maersk and HMM , despite solid volume increases; HMM reported a 14% increase in first-quarter volume, while Maersk reported “above market growth” of 9%. And despite stable volumes from other carriers such as Hapag-Lloyd , Ocean Network Express , Evergreen, Yang Ming and OOCL , their revenues were significantly eroded by weaker rates; Hapag even posted a loss in Q1. Yet carrier executives insist that the excess supply can be mitigated and the surplus tonnage absorbed — this year at least — by a combination of vessel management, trade imbalances, the ongoing effects of geopolitical disruption, and an increase in scrapping. Some heavy lifting will be required. Maersk CEO Vincent Clerc put the current excess supply in the market at 1 million to 1.5 million TEUs, with the longer routes around southern Africa absorbing another 2 million TEUs. “So, it's about 3.5 million TEUs overall that is the total capacity overhang to normalized trade routes today,” Clerc said during Maersk’s recent Q1 earnings call with analysts. But he believes excess capacity can be managed by carriers showing discipline in how they deploy capacity, a rise in scrapping and by a new wave of slow steaming that will be triggered by high energy costs. “The deliveries are okay this year, but they are picking up significantly next year, and that’s going to put further pressure on the overhang,” he added. Despite the significant capacity overhang, Clerc believes high energy costs, driven by the effective closure of the Strait of Hormuz amid the ongoing war in the Middle East, will soon trigger a wave of slow steaming that could absorb up to an additional 1.5 million TEUs of capacity. “We’re looking at it ourselves, and the cost benefit is quite compelling,” he said. “But if we don’t pick up scrapping and actually retire some of the ships that have not been retired over the last seven years, this is going to be extremely bumpy.” Swelling order book The global order book continues to swell, with total capacity on order currently at 12.3 million TEUs, 37% of the in-service fleet, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. Sea-web data shows just over 1 million TEUs of capacity via ships over 10,000 TEUs is scheduled to be delivered this year, contributing to capacity growth of 4% amid market predictions for demand growth of 2% to 3% this year. Around 2.3 million TEUs of capacity are due for delivery in 2027 and 3.4 million TEUs in 2028. Rolf Habben Jansen, CEO of Maersk’s Gemini Cooperation partner Hapag-Lloyd, also pointed to vessel management levers such as slow steaming and blank sailings, as well as increased scrapping, to limit the effects of excess tonnage. But he noted that another capacity-absorbing factor was emerging in the form of an imbalance between the dominant trade lanes of head-haul corridors and non-dominant lanes. Habben Jansen said growth on the dominant legs of a trade lane is what drives capacity needs, not the overall market growth, noting that strong growth on dominant trade lanes -- 10% in 2024 and 8% in 2025 -- was helping to offset the impact of new supply on rate levels. “In 2026, the growth on the dominant legs will be higher than the additional supply that comes into the market, acting as a mitigating factor against overcapacity,” he said during Hapag’s earnings call last week. Supply management to be tested How demand and rates shape up through the second quarter and peak season will put the capacity-mitigating confidence of carrier executives to the test, particularly on the trans-Pacific. US imports from Asia have fallen 4.6% this year through April, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Despite the weak demand, carriers on the trans-Pacific are having some success with rate increases amid an environment of sharply higher fuel costs. Platts, a sister company of the Journal of Commerce, believes rates are being supported by blank sailings, smaller vessel deployments and tighter space allocations. Spot rates for Asia to the US West Coast were at $3,200 per FEU as of May 18 — up 84% in two months, according to Platts. East Coast rates were at $4,200/FEU. A series of general rate increases (GRIs) was issued in mid-May, with carriers announcing another set from June 1 as high as $3,000 per FEU, combined with a wave of fuel‑linked surcharge adjustments ranging from $200/FEU to $500/FEU. Asia-Europe volume from Container Trades Statistics is only available for the first quarter, but shows a 13% increase year over year, continuing the strong demand recorded last year when the trade lane grew volume by 8%. Rates have been rising; on Asia-North Europe they are up 17% week on week at $2,800/FEU, with Asia-Mediterranean rates climbing 8% to $4,000/FEU, Platts data shows. The gains appear to be driven by demand and not carrier capacity management, with a significant increase in deployed capacity on Asia-North Europe and a cut in blank sailings. Data from eeSea, part of rate benchmarking platform Xeneta, shows capacity on Asia-North Europe in May will be up 16% from April at 1.2 million TEUs, with blank sailings down 5%. In June, planned capacity will fall to 1.1 million TEUs while planned blank sailings will be halved. It is a more dramatic picture on the trans-Pacific. Asia-US will see 1.96 million TEUs deployed in May, up 4% from April, with blank sailings falling 36%. Planned capacity in June will increase to 2.1 million TEUs while blank sailings will drop by almost 40%. The demand picture for the rest of the year remains unclear. Mediterranean Shipping Co. CEO Soren Toft told the Journal of Commerce in London last week that consumer behavior in both the US and Europe was difficult to predict in the current global economic climate. Rising energy prices to dampen demand The International Monetary Fund (IMF) has revised its economic growth forecast downward from 3.3% to 2.8% with the expectation that rising energy prices will dampen demand. At the same time, the war in the Middle East is fueling inflation fears, product shortages and aggressive stockpiling by manufacturers worldwide, according to the GEP Global Supply Chain Volatility Index compiled by S&P Global and released May 12. Businesses globally have ramped up safety stockpiling of goods and raw materials at the fastest rate in three years as they seek to secure supply ahead of further price increases and disruption, the GEP survey found. European manufacturers reported the most aggressive inventory building, signaling heightened concern over supply availability and costs. “Even if tensions in the Middle East ease quickly, global supply chains are unlikely to normalize for another six to 12 months,” John Piatek, vice president of consulting at GEP, said in his analysis of the survey results. “What stands out in April’s data is how broadly the disruption is spreading,” he added. "Shortages worsened across every major region, signaling this is no longer an isolated transport shock. Companies worldwide are now scrambling to secure supply and protect themselves against further inflation and disruption.” A softening of Asian exports because of the stockpiling will likely result in oversupplied carriers rapidly scaling up blank sailings to support rate levels. Maersk and Hapag-Lloyd in March amended their Gemini Cooperation agreement across all global service loops to modify the timing of discussions regarding potential seasonal blank sailings. Under previous terms, the carriers were authorized to blank sailings only during Chinese New Year or Chinese Golden Week, provided such agreement was reached no later than 12 weeks prior to the scheduled date of the sailing. The new agreement allows the carriers to announce blanks six to eight weeks before sailings. Contact Greg Knowler at greg.knowler@spglobal.com .

Asia-Europe

Trans-Pacific

Ocean carriers face growing order book nearing 40% of in-service fleet

<div class="phx-topic abstract-wrapper">The BCO technology provider, in a bid to avoid costly dispute resolution, has identified 20 use cases under which shippers, consignees and carriers can agree to be held responsible for container storage.</div>

The BCO technology provider, in a bid to avoid costly dispute resolution, has identified 20 use cases under which shippers, consignees and carriers can agree to be held responsible for container storage.

<div class="phx-topic">International logistics software vendor BuyCo is proposing that shippers and carriers agree to a standard set of contract terms that would apportion responsibility for the cost of container detention and demurrage. BuyCo’s proposal delineates, for 20 different circumstances that can lead to detention and demurrage, which party is accountable, and thus contractually would absolve the other parties from blame. The goal would be to include the mutually accepted rules in ocean freight contracts so there would be clarity around which party would be responsible for the storage fees and to avoid disputes, which BuyCo notes leads to costly overhead for importers, exporters, and shipping lines. “The idea is that it’s so simple, a kid could understand it,” said BuyCo CEO Carl Lauron said in an interview with the Journal of Commerce. “We’re playing together, let’s agree on the rules.” Marseille-based BuyCo provides international transportation management software for beneficial cargo owners (BCOs). Its customers include Goodyear, Hershey, Renault, and TotalEnergies. BuyCo executives formally presented their D&amp;D proposal at the Digital Container Shipping Association’s DCSA+ Day, an event held in Singapore in late April that brought together DCSA’s container line members, its technology and consulting partners, and a group of forwarders and shippers to discuss ways to make the container shipping industry more efficient. DCSA is an organization representing most of the world’s top liner carriers that is driving the adoption of digital standards in the ocean freight industry. <h3>Rules developed with customer feedback </h3>Lauron said BuyCo customers helped it create a list of more than 50 different root causes of detention and demurrage disputes, with the software vendor whittling that down to the 20 most common use cases to make the proposal more digestible. Of those 20, seven would be a shipper’s liability, seven would be a carrier’s fault, and the remaining six would be the consignee’s fault. Examples of a shipper’s responsibility: a lack of export documentation compliance, damaged equipment in a merchant haulage scenario (where the shipper arranges drayage), and a failure to meet vessel cutoff at the origin port. Carriers would agree to be held responsible when storage fees are accrued due to transshipment delays, late or inaccurate communication around vessel cutoffs, or when a container is rolled. Meanwhile, consignees would agree to pay storage fees in situations such as when they asked for a container rerouting, or when warehouse capacity at destination precluded their ability to pick up a container. “This is a common sense approach written on paper, which at the end of the day would be the rules of the game that every player needs,” said Olivier Martinot, global transports and customs leader for Adeo, a major home improvement retailer in Europe and a BuyCo customer. Martinot, though, acknowledged it will be challenging to drive adoption of the rules simply because each major region has its own culture and regulatory environment. “From my French-based shipper window, we would need a significant panel of large, impactful shippers allied if we want to make it happen with carriers on French-based contacts,” he said. “I’m not sure at all we could reach a global agreement, and to me, this is where the major difficulty is.” But Lauron said there was a positive reception to the idea from both shippers and container lines at the April DCSA meeting. BuyCo is in the process of championing the idea to individual carriers to galvanize support for the proposal. <h3>Long-standing problem </h3>The idea of making responsibility for detention and demurrage more concrete has long been an elusive goal. The National Industrial Transportation League (NITL) in 2023 developed a so-called “shipper bill of rights” that specified 14 things to which a shipper was entitled in its relationship with container lines. Included in that list was pricing transparency and efficiency in claims resolution. Detention and demurrage costs spiraled during the pandemic and have remained higher than before COVID-19, prompting shippers to use an array of technology providers and freight audit companies to automate disputes across thousands of invoices and claw back refunds. BuyCo’s approach has been to look at incentives more holistically, Lauron said, in ways that would motivate both container lines and shippers to be accountable, and to avoid the presumption that carriers are always in the wrong when a storage dispute occurs. “This started with our customers asking us to check on invoicing,” he said. “And the real pain was not freight, but the D&amp;D. Instead of looking at the invoicing, let’s look at the actual D&amp;D that’s being created because if you reduce D&amp;D accrued, you automatically reduce the claims.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

International logistics software vendor BuyCo is proposing that shippers and carriers agree to a standard set of contract terms that would apportion responsibility for the cost of container detention and demurrage. BuyCo’s proposal delineates, for 20 different circumstances that can lead to detention and demurrage, which party is accountable, and thus contractually would absolve the other parties from blame. The goal would be to include the mutually accepted rules in ocean freight contracts so there would be clarity around which party would be responsible for the storage fees and to avoid disputes, which BuyCo notes leads to costly overhead for importers, exporters, and shipping lines. “The idea is that it’s so simple, a kid could understand it,” said BuyCo CEO Carl Lauron said in an interview with the Journal of Commerce. “We’re playing together, let’s agree on the rules.” Marseille-based BuyCo provides international transportation management software for beneficial cargo owners (BCOs). Its customers include Goodyear, Hershey, Renault, and TotalEnergies. BuyCo executives formally presented their D&D proposal at the Digital Container Shipping Association’s DCSA+ Day, an event held in Singapore in late April that brought together DCSA’s container line members, its technology and consulting partners, and a group of forwarders and shippers to discuss ways to make the container shipping industry more efficient. DCSA is an organization representing most of the world’s top liner carriers that is driving the adoption of digital standards in the ocean freight industry. Rules developed with customer feedback Lauron said BuyCo customers helped it create a list of more than 50 different root causes of detention and demurrage disputes, with the software vendor whittling that down to the 20 most common use cases to make the proposal more digestible. Of those 20, seven would be a shipper’s liability, seven would be a carrier’s fault, and the remaining six would be the consignee’s fault. Examples of a shipper’s responsibility: a lack of export documentation compliance, damaged equipment in a merchant haulage scenario (where the shipper arranges drayage), and a failure to meet vessel cutoff at the origin port. Carriers would agree to be held responsible when storage fees are accrued due to transshipment delays, late or inaccurate communication around vessel cutoffs, or when a container is rolled. Meanwhile, consignees would agree to pay storage fees in situations such as when they asked for a container rerouting, or when warehouse capacity at destination precluded their ability to pick up a container. “This is a common sense approach written on paper, which at the end of the day would be the rules of the game that every player needs,” said Olivier Martinot, global transports and customs leader for Adeo, a major home improvement retailer in Europe and a BuyCo customer. Martinot, though, acknowledged it will be challenging to drive adoption of the rules simply because each major region has its own culture and regulatory environment. “From my French-based shipper window, we would need a significant panel of large, impactful shippers allied if we want to make it happen with carriers on French-based contacts,” he said. “I’m not sure at all we could reach a global agreement, and to me, this is where the major difficulty is.” But Lauron said there was a positive reception to the idea from both shippers and container lines at the April DCSA meeting. BuyCo is in the process of championing the idea to individual carriers to galvanize support for the proposal. Long-standing problem The idea of making responsibility for detention and demurrage more concrete has long been an elusive goal. The National Industrial Transportation League (NITL) in 2023 developed a so-called “shipper bill of rights” that specified 14 things to which a shipper was entitled in its relationship with container lines. Included in that list was pricing transparency and efficiency in claims resolution. Detention and demurrage costs spiraled during the pandemic and have remained higher than before COVID-19, prompting shippers to use an array of technology providers and freight audit companies to automate disputes across thousands of invoices and claw back refunds. BuyCo’s approach has been to look at incentives more holistically, Lauron said, in ways that would motivate both container lines and shippers to be accountable, and to avoid the presumption that carriers are always in the wrong when a storage dispute occurs. “This started with our customers asking us to check on invoicing,” he said. “And the real pain was not freight, but the D&D. Instead of looking at the invoicing, let’s look at the actual D&D that’s being created because if you reduce D&D accrued, you automatically reduce the claims.” Contact Eric Johnson at eric.johnson@spglobal.com .

Software vendor offers proposal to establish detention, demurrage accountability

Use code GTT26W at checkout and save $900 on first year of an annual Gold subscription!

Upgrade Subscription - Gold Trials

Become a Gold Subscriber and Save!

Arm your team with the most trusted information portal for the international container shipping industry.

Group Subscriptions - Wide Box

Get into a group subscription today

Use code FTW25 at checkout to save 25% on a Silver or Silver Plus annual subscription! 

Subscribe Now - FT to S/SP - Wide Box

SUBSCRIBE AND SAVE

Use code GW595 and upgrade to Gold for just $595! Valid for first year of subscription.

Upgrade Subscription - S/SP to Gold - Wide Box

SAVE $900 ON A GOLD SUBSCRIPTION

Choose a subscription plan that works best for you!

Subscribe Now - Anonymous to S/SP - Wide Box

Subscribe Today

Access Journal of Commerce content for 30 days

Free Trial - Wide Box

START A FREE TRIAL TODAY

Use code GW995 at checkout to save $500 on first year of a Gold subscription!

Subscribe Now - FT to Gold - Wide Box

Subscribe Now - Anonymous to Gold - Wide Box

SUBSCRIBE TODAY

Subscribe and Save: Use code FTW25 to save 25% on first year of a Silver or Silver Plus annual subscription!


Subscribe Now - FT to S/SP - Offer Box

Subscribe and Save

GET INTO A GROUP SUBSCRIPTION: Arm your team with unlimited Journal of Commerce content

Group Subscriptions - Offer Box

Group Subscriptions

SUBSCRIBE TODAY: Choose a subscription plan that works best for you!

Subscribe Now - Anonymous to S/SP - Offer Box

UPGRADE TO GOLD AND SAVE: Use code GTT26W at checkout and save $900 on first year of a Gold subscription!

Upgrade Subscription

Subscribe Now - Anonymous to Gold - Offer Box

SAVE $900 ON A GOLD SUBSCRIPTION: Use code GW595 and upgrade to Gold for just $595! Valid on first year of subscription.

Upgrade Subscription - S/SP to Gold - Offer Box

SUBSCRIBE AND SAVE: Use code GW995 and save $500 on the first year of a Gold subscription!

Subscribe Now - FT to Gold - Offer Box

A must-attend conference for shippers & logistics providers moving goods inland

Inland Conference - Rectangle Box

Attend Inland26

Monthly publication providing an editorial deep dive into global supply chain news

Journal of Commerce Magazine - Rectangle Box

Journal of Commerce Magazine

A premium access index of savings using domestic intermodal vs. OTR 

ISI Report - Rectangle Box

Intermodal Savings Index

An in-depth analysis of transport trends in the multipurpose and heavy-lift fleet segment

Breakbulk Report - Rectangle Box

Breakbulk Quarterly

An extensive dashboard of charts organized by trade lane, mode, and topic

Gateway - Rectangle Box

Gateway

Customers scoring their intermodal partners to identify the best service providers

Latest News

More News & Analysis

Bankruptcy court approves STG Logistics’ exit from Chapter 11

WiseTech joins partner program of container shipping digital standards group

Senate approves Kloster for seat on Surface Transportation Board