<div class="phx-topic abstract-wrapper">Carriers continue to be successful in their capacity management strategies, preventing a rate decline despite a sharp reduction in demand and a steep drop in fuel prices.</div>

Carriers continue to be successful in their capacity management strategies, preventing a rate decline despite a sharp reduction in demand and a steep drop in fuel prices.

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<div>The blank sailing strategy by carriers continues to prop up pricing levels on Asia-North Europe routes, with the spot rate actually rising $29 per TEU as capacity withdrawn from the trade this week reaches its highest level ever.Carriers have been aggressively cutting capacity through May and June to prevent a rate slide as consumer demand disappears amid Europe-wide lockdowns to combat the coronavirus disease 2019 (COVID-19) that have closed most retail outlets.Sea-Intelligence Maritime Consulting expects at least 35 percent of the available capacity on Asia-Europe to be blanked over the next three weeks, while maritime academic Theo Notteboom said the...

The blank sailing strategy by carriers continues to prop up pricing levels on Asia-North Europe routes, with the spot rate actually rising $29 per TEU as capacity withdrawn from the trade this week reaches its highest level ever. Carriers have been aggressively cutting capacity through May and June to prevent a rate slide as consumer demand disappears amid Europe-wide lockdowns to combat the coronavirus disease 2019 (COVID-19) that have closed most retail outlets. Sea-Intelligence Maritime Consulting expects at least 35 percent of the available capacity on Asia-Europe to be blanked over the next three weeks, while maritime academic Theo Notteboom said the withdrawn capacity this week could be as high as 38 percent. It is so far proving to be an effective strategy. Despite blank sailings peaking this week, cutting close to 40 percent of Asia-Europe capacity , the spot rate is —incredibly — 15.2 percent higher than during the same week last year. Rates from Shanghai to North Europe increased almost 4 percent to $753 per TEU in the past week, according to the latest reading of the weekly Shanghai Shipping Exchange’s Shanghai Containerized Freight Index (SCFI). Click to enlarge The spot rate has defied even the collapsing fuel price. Since March, the average price of low-sulfur fuel has fallen 52 percent to $203 per ton, and the price of high-sulfur fuel has halved to $143 per ton, according to data from the Oil Price Information Service (OPIS), a sister product of JOC.com within IHS Markit. Yet in the last seven weeks, the Asia-North Europe spot rate has only fallen $51 per TEU, according to the JOC Shipping & Logistics Pricing Hub . Rates tested by weak market The question is how long a rate slide can be held off by blank sailings, something that will be determined only when demand returns to Europe. Countries across the continent have already begun taking progressive steps to come out of the continent-wide lockdowns, with Kuehne + Nagel CEO Detlef Trefzger predicting the recovery will begin in June . “What we need is a release of all the curfews and lockdowns, but that’s a government decision, not an economic or a business decision,” Trefzger said in a first quarter earnings call Monday. “And then we need people that have enough money to spend to consume again.” “For the third quarter, we will see growth again,” he added. “I would not say it will be a V-shape. I don’t know what shape it will look like. But it will also not be a U, as some people have speculated. It will be a gradual improvement, and we are ready for that.” Drewry Maritime Research was also cautious about predicting any recovery in the container shipping market that it believes will remain volatile through 2020. “Ocean carriers’ finely tuned skills in the art of capacity management are going to be sorely tested in the coming months,” the analyst wrote in a recent market insight. “It is their daunting task to judge how much container ship capacity is needed during the demand pullback, and also to be ready to service the market when the recovery begins, whenever that may be.” Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler .

Maritime

Capacity cuts hold up Asia-Europe rates

<div class="phx-topic abstract-wrapper">But the US’ largest intermodal provider said during its fourth-quarter earnings call it is not forecasting a market inflection just yet, citing the “false starts” the industry has seen during the past 18 months.</div>

But the US’ largest intermodal provider said during its fourth-quarter earnings call it is not forecasting a market inflection just yet, citing the “false starts” the industry has seen during the past 18 months.

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<div class="phx-topic">The US truckload market is “fragile” enough given the capacity now exiting that a disruption or demand catalyst could quickly send prices higher and mark the end of the freight recession, according to J. B. Hunt. But the US’ largest intermodal provider is not forecasting an inflection just yet, citing what it called the “false starts” the market has seen during the past 18 months. “[An] uptick in demand could create an environment that’s different than what we’ve seen in the last several years,” J.B. Hunt CEO Shelley Simpson said late Thursday during the company’s fourth-quarter earnings call. “Having said that, we’re not holding our breath…We want to finish up at least January and February and see what happens there.” Spot market truckload rates paid by the shipper rose 19 cents month over month in December to $2.46 per mile on lanes greater than 250 miles, according to a Journal of Commerce analysis of data from DAT Freight and Analytics, Sunset Transportation, and digital platform Loadsmart. Shippers have told the Journal of Commerce, however, that the December spot market surge has not emerged as a topic in ongoing truckload contract negotiations. “Most customers view recent market tightening as temporary and seasonal rather than a structural shift,” Spencer Frazier, J.B. Hunt’s executive vice president of sales, said on the earnings call. “After several years of mixed signals and forecasting challenges, customers will only acknowledge a structural change after they feel a tighter market for a longer period of time, likely driven by some degree of both reduced capacity and stronger demand.” <h3>Intermodal markets still sluggish </h3>Intermodal demand, which often lags truckload, has yet to strengthen enough to shift pricing power back toward carriers. J.B. Hunt reported that its intermodal revenue was down 3% and volume down 2% year over year in the fourth quarter. Volume on the West Coast dropped 6%, while East Coast volume rose 5% in Q4. Intermodal operating income increased 16% year over year in the quarter, driven by lower costs and a strategy of walking away from low-margin freight. Over the past year, J.B. Hunt has emphasized yield and margin discipline even at the expense of weaker volume and revenue. To support that goal, the company has taken a tougher stance on pricing, a decision that has resulted in losing share to competitors in California. RailState, a rail visibility and analytics provider, reported that Union Pacific Railroad’s domestic intermodal volume out of Southern California increased more than 20% year over year in the fourth quarter, while BNSF Railway’s volume fell about 5%. The divergence suggests that UP partners such as Hub Group and Schneider National have captured business at J.B. Hunt’s expense in Southern California. BNSF is J.B. Hunt’s exclusive partner in the western US. Despite J.B. Hunt’s emphasis on margins, there is no indication that intermodal pricing dynamics have shifted materially from a year ago. During the 2025 bid cycle, intermodal providers were generally able to secure rate increases on outbound lanes from California, but struggled to do so elsewhere. “We’re a little bit hesitant to suggest that we think there’s some big pricing opportunity, but we’ll be quick to identify when we see the market shift...,” Darren Field, J.B. Hunt’s president of intermodal, said during the call. Field added that it’s too early to gauge 2026 contract pricing, noting that many of the intermodal bids in the fourth quarter were backhaul routes. Pricing on those lanes was flat to down last year as e-commerce giant Amazon continued to offer low rates to third-party shippers to fill capacity on return moves to Southern California. Field also made brief remarks about the UP-Norfolk Southern merger application filed Dec. 19 with the US Surface Transportation Board. “We continue to digest the application and had expected more intermodal-specific questions to be addressed in the merger application than there were [addressed],” he said. Analysts did not ask Field to elaborate. J.B. Hunt did not respond to a Journal of Commerce request for comment on which intermodal-related issues it expected to be addressed in the filing but were not. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a></div>

The US truckload market is “fragile” enough given the capacity now exiting that a disruption or demand catalyst could quickly send prices higher and mark the end of the freight recession, according to J. B. Hunt. But the US’ largest intermodal provider is not forecasting an inflection just yet, citing what it called the “false starts” the market has seen during the past 18 months. “[An] uptick in demand could create an environment that’s different than what we’ve seen in the last several years,” J.B. Hunt CEO Shelley Simpson said late Thursday during the company’s fourth-quarter earnings call. “Having said that, we’re not holding our breath…We want to finish up at least January and February and see what happens there.” Spot market truckload rates paid by the shipper rose 19 cents month over month in December to $2.46 per mile on lanes greater than 250 miles, according to a Journal of Commerce analysis of data from DAT Freight and Analytics, Sunset Transportation, and digital platform Loadsmart. Shippers have told the Journal of Commerce, however, that the December spot market surge has not emerged as a topic in ongoing truckload contract negotiations. “Most customers view recent market tightening as temporary and seasonal rather than a structural shift,” Spencer Frazier, J.B. Hunt’s executive vice president of sales, said on the earnings call. “After several years of mixed signals and forecasting challenges, customers will only acknowledge a structural change after they feel a tighter market for a longer period of time, likely driven by some degree of both reduced capacity and stronger demand.” Intermodal markets still sluggish Intermodal demand, which often lags truckload, has yet to strengthen enough to shift pricing power back toward carriers. J.B. Hunt reported that its intermodal revenue was down 3% and volume down 2% year over year in the fourth quarter. Volume on the West Coast dropped 6%, while East Coast volume rose 5% in Q4. Intermodal operating income increased 16% year over year in the quarter, driven by lower costs and a strategy of walking away from low-margin freight. Over the past year, J.B. Hunt has emphasized yield and margin discipline even at the expense of weaker volume and revenue. To support that goal, the company has taken a tougher stance on pricing, a decision that has resulted in losing share to competitors in California. RailState, a rail visibility and analytics provider, reported that Union Pacific Railroad’s domestic intermodal volume out of Southern California increased more than 20% year over year in the fourth quarter, while BNSF Railway’s volume fell about 5%. The divergence suggests that UP partners such as Hub Group and Schneider National have captured business at J.B. Hunt’s expense in Southern California. BNSF is J.B. Hunt’s exclusive partner in the western US. Despite J.B. Hunt’s emphasis on margins, there is no indication that intermodal pricing dynamics have shifted materially from a year ago. During the 2025 bid cycle, intermodal providers were generally able to secure rate increases on outbound lanes from California, but struggled to do so elsewhere. “We’re a little bit hesitant to suggest that we think there’s some big pricing opportunity, but we’ll be quick to identify when we see the market shift...,” Darren Field, J.B. Hunt’s president of intermodal, said during the call. Field added that it’s too early to gauge 2026 contract pricing, noting that many of the intermodal bids in the fourth quarter were backhaul routes. Pricing on those lanes was flat to down last year as e-commerce giant Amazon continued to offer low rates to third-party shippers to fill capacity on return moves to Southern California. Field also made brief remarks about the UP-Norfolk Southern merger application filed Dec. 19 with the US Surface Transportation Board. “We continue to digest the application and had expected more intermodal-specific questions to be addressed in the merger application than there were [addressed],” he said. Analysts did not ask Field to elaborate. J.B. Hunt did not respond to a Journal of Commerce request for comment on which intermodal-related issues it expected to be addressed in the filing but were not. Contact Ari Ashe at ari.ashe@spglobal.com

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Truckload at a tipping point; intermodal still lagging: J.B. Hunt

<div class="phx-topic abstract-wrapper">But rapid development of the record 8.4 gigawatts of new offshore capacity could lead to ship capacity constraints and logistical bottlenecks.</div>

But rapid development of the record 8.4 gigawatts of new offshore capacity could lead to ship capacity constraints and logistical bottlenecks.

<div class="phx-topic">Multipurpose and heavy-lift vessel operators are set for a surge of cargo linked to offshore wind farms around the coast of Britain after the UK government green lit eight projects totaling $30 billion for completion by 2030. The projects, announced on Jan. 14, cover a record 8.4 gigawatts (GW) of new offshore wind capacity split between six fixed and two floating sites around the coast of Britain following a government-backed auction of new locations. They will represent a 50% increase in offshore wind capacity from the 16 GW operating at the end of 2025. Still, vessel operators and analysts cautioned the development of so much offshore wind capacity in such a short period could cause supply chain bottlenecks due to due limits on specialized vessel availability, port capacity, and the manufacturing capability of key equipment. “The volume of bottom-fixed projects implies a very high level of demand for heavy-lift and jack-up vessels, increasing the risk of installation bottlenecks if schedules converge,” Maëlig Gaborieau, senior offshore wind analyst at consultancy Spinergie, told the Journal of Commerce. Gaborieau said the supply of nacelles, which house the power generation equipment at the top of the turbine tower, is the most exposed part of the supply chain. “The scale program is such that UK projects alone will absorb a very significant share of European nacelle manufacturing capacity over a short period,” he said. “This makes nacelles the most critical component-level risk in terms of delivery timelines.” The supply of monopile foundations is also tight, although components are likely to be imported by non-European manufacturers including China, which would provide some additional flexibility, the analyst said. <h3>Ship capacity a concern </h3>Michael Mørland, project cargo director at MPV operator G2 Ocean, said there is currently limited capacity of MPVs and heavy-lift ships that can handle longer and heavier equipment, including blades and monopiles. “Blades, for example, typically span 344 to 377 feet, demanding ships with extended holds for tower sections and expansive, unobstructed weather decks to accommodate such lengths,” he told the Journal of Commerce. Some operators have seen this gap in the market and have ordered vessels that can more easily handle and install the latest generation of wind farm components. G2 Ocean will take delivery of 10 82,000-deadweight metric ton open hatch MPVs between now and 2029. Chipolbrok has 11 heavy-lift MPVs on order, including up to 10 60,800-dwt ships ordered last week, while DSME took delivery of the Norse Energi, on Jan. 15, its second new wind turbine installation vessel purpose built to install the next generation of large-scale offshore wind turbines. Mørland thought that this extra cargo volume could ease capacity constraints, but it would also lead to a firming in charter rates with the more capable ships attracting a premium. He said the eight UK projects are expected to involve the installation of approximately 500 to 600 turbines, “boosting the project cargo volumes bound for the North Sea.” “For G2 Ocean, this signals renewed momentum in the offshore wind segment – a welcome change after a period of slower growth,” Mørland said. <h3>Ports a possible chokepoint </h3>Mørland also highlighted port capacity as a potential bottleneck for the cargo needed for the UK projects. “The availability of lay-down areas and mobilization yards is a concern that has been widely raised in relation to this project,” he said. “The UK has limited space for these large offshore wind components. “Complicating matters, the UK’s departure from the EU means that utilizing facilities in neighboring countries for storage and staging is no longer as straightforward,” he added. “Deciding where the components will be manufactured, as well as securing sufficient staging, lay-down, and mobilization yard capacities, must be addressed fast to avoid delays to the projects.” But Spinergie’s Gaborieau said pressure on ports could be reduced by components being delivered and installed progressively, allowing more manageable lay-down capacity. Mørland thought the winners of the eight projects would be already talking to potential shipping and equipment company partners. RWE, the German energy company, won approval for five of the eight projects — Norfolk Vanguard East, Norfolk Vanguard West, and two Dogger Bank South projects in the British North Sea, plus the Awel y Môr project located in the Irish Sea — that total 6.9 GW of capacity. Investment firm KKR has teamed up with RWE to jointly develop, build and operate the two Norfolk Vanguard projects. Energy company SSE will develop the 1,380-megawatt (MW) Berwick Bank B project in northern England. Highland Wind, led by Copenhagen Offshore Partners, is developing the 9.5-MW Pentland floating offshore wind farm off the coast of northern Scotland. The second floating wind farm development is Blue Gem Wind’s 100-MW project off the coast of Wales. RWE and SSE declined to comment beyond their official statements. Other companies, including turbine suppliers Vestas and Siemens Gamesa, did not respond to requests for comment from the Journal of Commerce. Contact Keith Wallis at keithwallis@hotmail.com. </div>

Multipurpose and heavy-lift vessel operators are set for a surge of cargo linked to offshore wind farms around the coast of Britain after the UK government green lit eight projects totaling $30 billion for completion by 2030. The projects, announced on Jan. 14, cover a record 8.4 gigawatts (GW) of new offshore wind capacity split between six fixed and two floating sites around the coast of Britain following a government-backed auction of new locations. They will represent a 50% increase in offshore wind capacity from the 16 GW operating at the end of 2025. Still, vessel operators and analysts cautioned the development of so much offshore wind capacity in such a short period could cause supply chain bottlenecks due to due limits on specialized vessel availability, port capacity, and the manufacturing capability of key equipment. “The volume of bottom-fixed projects implies a very high level of demand for heavy-lift and jack-up vessels, increasing the risk of installation bottlenecks if schedules converge,” Maëlig Gaborieau, senior offshore wind analyst at consultancy Spinergie, told the Journal of Commerce. Gaborieau said the supply of nacelles, which house the power generation equipment at the top of the turbine tower, is the most exposed part of the supply chain. “The scale program is such that UK projects alone will absorb a very significant share of European nacelle manufacturing capacity over a short period,” he said. “This makes nacelles the most critical component-level risk in terms of delivery timelines.” The supply of monopile foundations is also tight, although components are likely to be imported by non-European manufacturers including China, which would provide some additional flexibility, the analyst said. Ship capacity a concern Michael Mørland, project cargo director at MPV operator G2 Ocean, said there is currently limited capacity of MPVs and heavy-lift ships that can handle longer and heavier equipment, including blades and monopiles. “Blades, for example, typically span 344 to 377 feet, demanding ships with extended holds for tower sections and expansive, unobstructed weather decks to accommodate such lengths,” he told the Journal of Commerce. Some operators have seen this gap in the market and have ordered vessels that can more easily handle and install the latest generation of wind farm components. G2 Ocean will take delivery of 10 82,000-deadweight metric ton open hatch MPVs between now and 2029. Chipolbrok has 11 heavy-lift MPVs on order, including up to 10 60,800-dwt ships ordered last week, while DSME took delivery of the Norse Energi, on Jan. 15, its second new wind turbine installation vessel purpose built to install the next generation of large-scale offshore wind turbines. Mørland thought that this extra cargo volume could ease capacity constraints, but it would also lead to a firming in charter rates with the more capable ships attracting a premium. He said the eight UK projects are expected to involve the installation of approximately 500 to 600 turbines, “boosting the project cargo volumes bound for the North Sea.” “For G2 Ocean, this signals renewed momentum in the offshore wind segment – a welcome change after a period of slower growth,” Mørland said. Ports a possible chokepoint Mørland also highlighted port capacity as a potential bottleneck for the cargo needed for the UK projects. “The availability of lay-down areas and mobilization yards is a concern that has been widely raised in relation to this project,” he said. “The UK has limited space for these large offshore wind components. “Complicating matters, the UK’s departure from the EU means that utilizing facilities in neighboring countries for storage and staging is no longer as straightforward,” he added. “Deciding where the components will be manufactured, as well as securing sufficient staging, lay-down, and mobilization yard capacities, must be addressed fast to avoid delays to the projects.” But Spinergie’s Gaborieau said pressure on ports could be reduced by components being delivered and installed progressively, allowing more manageable lay-down capacity. Mørland thought the winners of the eight projects would be already talking to potential shipping and equipment company partners. RWE, the German energy company, won approval for five of the eight projects — Norfolk Vanguard East, Norfolk Vanguard West, and two Dogger Bank South projects in the British North Sea, plus the Awel y Môr project located in the Irish Sea — that total 6.9 GW of capacity. Investment firm KKR has teamed up with RWE to jointly develop, build and operate the two Norfolk Vanguard projects. Energy company SSE will develop the 1,380-megawatt (MW) Berwick Bank B project in northern England. Highland Wind, led by Copenhagen Offshore Partners, is developing the 9.5-MW Pentland floating offshore wind farm off the coast of northern Scotland. The second floating wind farm development is Blue Gem Wind’s 100-MW project off the coast of Wales. RWE and SSE declined to comment beyond their official statements. Other companies, including turbine suppliers Vestas and Siemens Gamesa, did not respond to requests for comment from the Journal of Commerce. Contact Keith Wallis at keithwallis@hotmail.com.

Energy projects

Heavy-haul transport

Project cargo

Breakbulk News

MPV, heavy-lift operators ready for UK offshore wind boom after project approvals

<div class="phx-topic abstract-wrapper">Noel Hacegaba made the announcement about the possible 1.8 million-TEU terminal during his first State of the Port presentation since taking over as CEO on Jan. 1 following the retirement of Mario Cordero.</div>

Noel Hacegaba made the announcement about the possible 1.8 million-TEU terminal during his first State of the Port presentation since taking over as CEO on Jan. 1 following the retirement of Mario Cordero.

<div class="phx-topic">The Port of Long Beach is exploring the possibility of developing what its new CEO said Thursday would be the “first conventional, zero-emissions container terminal in the world.” Noel Hacegaba made the announcement during his first State of the Port presentation since taking over as CEO on Jan. 1 following the retirement of Mario Cordero. Hacegaba said Long Beach has inked an exclusive agreement with Brookfield Infrastructure Group for the potential development of a 1.8 million-TEU terminal designed for express vessels of up to 9,000-TEU capacity. The facility, being called the Metro Express Terminal, would be built on Long Beach’s Pier S and use zero-emission, human-operated equipment, container peel-off operations, 24/7 gate access, free-flow cargo stacks and zero-emission trucks, he said. If it comes to fruition, Brookfield would partner with Nautilus International on the project, further details of which were not disclosed in Hacegaba’s presentation. That presentation made clear that the Port of Long Beach will leverage marine terminal expansion, massive investment in intermodal rail connectivity and the creation of a supply chain information highway to handle a projected doubling of container volume by 2050. That comes after the port handled a record 9.9 million laden and empty TEUs in 2025, according to data from the port. “According to our latest cargo forecast, 2050 is the year our container volumes will reach 20 million TEUs,” Hacegaba said. Long Beach forecasts it will handle about 9 million TEUs this year, which although down from 2025, will still rank among its top five years, he said. Long Beach faces an immediate challenge in adjusting to diminishing imports from China due to the Trump administration’s tariffs, and fewer exports to China because of that country’s counter tariffs. “Six years ago, about 70% of all our cargo — imports and exports — was tied to China,” Hacegaba said. “Today that’s down to 60%.” While the tariffs have fostered a shifting of US trade to Vietnam and other countries in Southeast Asia, it has also highlighted the importance of adding “speed, precision and reliability” to the Long Beach supply chain as it competes for cargo with other US ports, he said. <h3>Emphasis on on-dock rail connectivity </h3>Long Beach is investing $1.8 billion in its <a href="https://www.joc.com/article/inland-rail-connectivity-key-to-port-of-long-beach-growth-new-ceo-6133971">on-dock rail support facility at Pier B</a>, which is scheduled for completion in 2032. By assembling longer intermodal trains on dock rather than at near-dock sites that require a move by truck, the transfer of containers from vessel to train, which now takes slightly less than four days, will be reduced to 24 hours, Hacegaba said. “Our terminals are driving the movement of rail to inland points,” he said. “TTI (Total Terminals International) is already moving more than 50% of its containers by rail.” The <a href="https://www.joc.com/article/up-ns-deal-could-benefit-some-shippers-while-others-face-longer-transits-6143225">proposed merger of Union Pacific and Norfolk Southern</a>, which would create the nation’s first transcontinental railroad, holds the potential for faster, more efficient intermodal service to rail hubs in the eastern half of the country. Also, the announcement in November by BNSF Railway and CSX that they will <a href="https://www.joc.com/article/intermodal-cooperation-on-rails-has-declined-amid-cost-pressures-6152067">expand their intermodal partnership for service connecting Long Beach with rail terminals in the Ohio Valley and the Northeast</a> will cut transit times by as much as two days, Hacegaba said. Five of Long Beach’s six container terminals last year handled more than 1 million TEUs, with two of those facilities handling more than 2 million TEUs. International Transportation Service and Macquarie Asset Management in July broke ground on a project that will fill in a 19-acre slip at Pier G that will enhance operational efficiency and build a single, continuous wharf measuring 3,400 feet that will accommodate the berthing of two super-post Panamax ships at the same time, Hacegaba said. <h3>Data sharing within the supply chain </h3>Hacegaba also announced that development is beginning on Long Beach’s CargoNav digital platform that will navigate the supply chain one container at a time, from arrival on the dock to shipment to its final destination. Further information will be released in the coming months. Emphasizing the importance of data sharing among carriers, terminal operators, truckers, railroads and shippers, Long Beach several years ago unveiled its supply chain information highway through its community portal. “The goal was simple, end-to-end visibility via coast-to-coast connectivity,” Hacegaba said. Long Beach in the coming weeks will also launch a universal trucking appointment system that members of the Harbor Trucking Association asked for several years ago, he said. Projects that improve operational efficiency will be another priority, Hacegaba said, particularly those that continue to reduce harmful emissions from vessels, cargo-handling equipment, tugboats, trucks, and trains. “As we continue our quest to zero emissions, we remain laser-focused on our core mission — moving more cargo more quickly, safely, efficiently, and sustainably,” he said Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a></div>

The Port of Long Beach is exploring the possibility of developing what its new CEO said Thursday would be the “first conventional, zero-emissions container terminal in the world.” Noel Hacegaba made the announcement during his first State of the Port presentation since taking over as CEO on Jan. 1 following the retirement of Mario Cordero. Hacegaba said Long Beach has inked an exclusive agreement with Brookfield Infrastructure Group for the potential development of a 1.8 million-TEU terminal designed for express vessels of up to 9,000-TEU capacity. The facility, being called the Metro Express Terminal, would be built on Long Beach’s Pier S and use zero-emission, human-operated equipment, container peel-off operations, 24/7 gate access, free-flow cargo stacks and zero-emission trucks, he said. If it comes to fruition, Brookfield would partner with Nautilus International on the project, further details of which were not disclosed in Hacegaba’s presentation. That presentation made clear that the Port of Long Beach will leverage marine terminal expansion, massive investment in intermodal rail connectivity and the creation of a supply chain information highway to handle a projected doubling of container volume by 2050. That comes after the port handled a record 9.9 million laden and empty TEUs in 2025, according to data from the port. “According to our latest cargo forecast, 2050 is the year our container volumes will reach 20 million TEUs,” Hacegaba said. Long Beach forecasts it will handle about 9 million TEUs this year, which although down from 2025, will still rank among its top five years, he said. Long Beach faces an immediate challenge in adjusting to diminishing imports from China due to the Trump administration’s tariffs, and fewer exports to China because of that country’s counter tariffs. “Six years ago, about 70% of all our cargo — imports and exports — was tied to China,” Hacegaba said. “Today that’s down to 60%.” While the tariffs have fostered a shifting of US trade to Vietnam and other countries in Southeast Asia, it has also highlighted the importance of adding “speed, precision and reliability” to the Long Beach supply chain as it competes for cargo with other US ports, he said. Emphasis on on-dock rail connectivity Long Beach is investing $1.8 billion in its on-dock rail support facility at Pier B , which is scheduled for completion in 2032. By assembling longer intermodal trains on dock rather than at near-dock sites that require a move by truck, the transfer of containers from vessel to train, which now takes slightly less than four days, will be reduced to 24 hours, Hacegaba said. “Our terminals are driving the movement of rail to inland points,” he said. “TTI (Total Terminals International) is already moving more than 50% of its containers by rail.” The proposed merger of Union Pacific and Norfolk Southern , which would create the nation’s first transcontinental railroad, holds the potential for faster, more efficient intermodal service to rail hubs in the eastern half of the country. Also, the announcement in November by BNSF Railway and CSX that they will expand their intermodal partnership for service connecting Long Beach with rail terminals in the Ohio Valley and the Northeast will cut transit times by as much as two days, Hacegaba said. Five of Long Beach’s six container terminals last year handled more than 1 million TEUs, with two of those facilities handling more than 2 million TEUs. International Transportation Service and Macquarie Asset Management in July broke ground on a project that will fill in a 19-acre slip at Pier G that will enhance operational efficiency and build a single, continuous wharf measuring 3,400 feet that will accommodate the berthing of two super-post Panamax ships at the same time, Hacegaba said. Data sharing within the supply chain Hacegaba also announced that development is beginning on Long Beach’s CargoNav digital platform that will navigate the supply chain one container at a time, from arrival on the dock to shipment to its final destination. Further information will be released in the coming months. Emphasizing the importance of data sharing among carriers, terminal operators, truckers, railroads and shippers, Long Beach several years ago unveiled its supply chain information highway through its community portal. “The goal was simple, end-to-end visibility via coast-to-coast connectivity,” Hacegaba said. Long Beach in the coming weeks will also launch a universal trucking appointment system that members of the Harbor Trucking Association asked for several years ago, he said. Projects that improve operational efficiency will be another priority, Hacegaba said, particularly those that continue to reduce harmful emissions from vessels, cargo-handling equipment, tugboats, trucks, and trains. “As we continue our quest to zero emissions, we remain laser-focused on our core mission — moving more cargo more quickly, safely, efficiently, and sustainably,” he said Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com

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Long Beach considering development of ‘conventional, zero-emissions' terminal: CEO

<div class="phx-topic abstract-wrapper">The terminal, developed by a consortium of Hutchison Ports, CMA Terminals and Cosco Shipping Ports, aims to capture increasing east-west trade and is integrated with Egypt’s expanding transport network.</div>

The terminal, developed by a consortium of Hutchison Ports, CMA Terminals and Cosco Shipping Ports, aims to capture increasing east-west trade and is integrated with Egypt’s expanding transport network.

<div class="phx-topic">Red Sea Container Terminals (RSCT) opened Egypt’s first semiautomated facility Thursday at Sokhna Port near the southern entrance to the Suez Canal. The new terminal was developed by a consortium of Hutchison Ports, CMA Terminals and Cosco Shipping Ports and backed by a 30-year concession agreement with the Egyptian government. “With an investment exceeding $1.8 billion in the country, we recognize Egypt as a pivotal market at the intersection of key global trade routes,” Clemence Cheng, managing director for Europe at Hutchison Ports, said in a statement. The new terminal is coming online as major carriers begin to switch scheduled services from routes around the Cape of Good Hope to the Suez Canal and Red Sea. A <a href="https://www.joc.com/article/gemini-india-med-service-the-next-to-plan-return-to-red-seasuez-passage-6152941">Gemini Cooperation service on the India-Middle East-Mediterranean trade</a> is poised to <a href="https://www.joc.com/article/maersk-set-to-resume-regular-suez-transits-on-india-usec-mecl-loop-sources-6152441">join Maersk’s MECL service</a> and CMA CGM’s Indamex among major carriers in resuming transits through the Red Sea and Suez Canal. Situated a few kilometers south of the southern Suez Canal entrance and within the world’s deepest man-made port basin, RSCT’s Phase I includes a 1,200-meter berth, a water depth of 18 meters and an initial handling capacity of 1.7 million TEUs. Plans are in place to expand that to 3.5 million TEUs across 2.6 kilometers of quay. RSCT is integrated with Egypt’s expanding transport network, including direct highway and railway connections to major industrial zones, thus shortening transit times for imports, exports and transshipment. Major liners have mostly avoided the Red Sea/Suez route since late 2023 when Houthi militants operating in Yemen began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing lengthy diversions around southern Africa. A Red Sea diversion tracker launched Wednesday by maritime consultancy Drewry found that in the week ended Jan. 11, 26 container ships — the highest number in five weeks — sailed through the Suez Canal.   Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>.</div>

Red Sea Container Terminals (RSCT) opened Egypt’s first semiautomated facility Thursday at Sokhna Port near the southern entrance to the Suez Canal.  The new terminal was developed by a consortium of Hutchison Ports, CMA Terminals and Cosco Shipping Ports and backed by a 30-year concession agreement with the Egyptian government.  “With an investment exceeding $1.8 billion in the country, we recognize Egypt as a pivotal market at the intersection of key global trade routes,” Clemence Cheng, managing director for Europe at Hutchison Ports, said in a statement.  The new terminal is coming online as major carriers begin to switch scheduled services from routes around the Cape of Good Hope to the Suez Canal and Red Sea. A  Gemini Cooperation service on the India-Middle East-Mediterranean trade  is poised to  join Maersk’s MECL service  and CMA CGM’s Indamex among major carriers in resuming transits through the Red Sea and Suez Canal.  Situated a few kilometers south of the southern Suez Canal entrance and within the world’s deepest man-made port basin, RSCT’s Phase I includes a 1,200-meter berth, a water depth of 18 meters and an initial handling capacity of 1.7 million TEUs. Plans are in place to expand that to 3.5 million TEUs across 2.6 kilometers of quay.  RSCT is integrated with Egypt’s expanding transport network, including direct highway and railway connections to major industrial zones, thus shortening transit times for imports, exports and transshipment.  Major liners have mostly avoided the Red Sea/Suez route since late 2023 when Houthi militants operating in Yemen began their attacks on commercial shipping to protest Israel’s move into Gaza, forcing lengthy diversions around southern Africa.  A Red Sea diversion tracker launched Wednesday by maritime consultancy Drewry found that in the week ended Jan. 11, 26 container ships — the highest number in five weeks — sailed through the Suez Canal.    Contact Greg Knowler at  greg.knowler@spglobal.com .

Asia-Europe

Egypt opens new semiautomated Red Sea terminal as Suez traffic grows

<div class="phx-topic abstract-wrapper">Data center construction in the US has more than doubled since 2023, helping to counterbalance slower construction of warehouses, notes Jason Miller.</div>

Data center construction in the US has more than doubled since 2023, helping to counterbalance slower construction of warehouses, notes Jason Miller.

<div class="phx-topic">The 2025 US freight market, especially the domestic truckload sector, underperformed expectations held at this time last year. The US Bureau of Labor Statistics’ (BLS) truckload producer price index (PPI), an estimate of the prices long-haul general freight carriers receive for trucking services, was down 1.8% year over year as of September, despite diesel prices rising 5.4% in the same period. This raises the question: Why did the market underperform expectations, including my own prediction that the truckload PPI would climb between 6% and 10% year over year by late 2025? <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6152975_0.1.jpg"></img></div>The strongest culprit for the underperformance was the Trump administration’s tariffs, and more specifically, the uncertainty created by their inconsistent implementation, with expansions and rollbacks often coming at a moment’s notice. Such uncertainty causes companies to postpone difficult-to-reverse investments, such as hiring new workers and expanding operations. Consistent with this, hiring by private employers reported by the BLS’s Job Openings and Labor Turnover Survey program has fallen to levels not seen since 2010, and manufacturing survey data on capital investment intentions aggregated across five regional Federal Reserve banks fell sharply in February after rising strongly in December 2024 and January 2025. With this in mind, I expect demand for trucking services to show limited growth in the first half of 2026, with the potential to improve in the second half. Seasonally adjusted single-family housing starts have consistently been down 7% to 11% year over year from March through August, the most recent data available, except for July. Improved housing activity has the potential to be the greatest catalyst for improved freight demand. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="37cf2651-a5fa-4c43-acf0-90fbc3d3695e"></dynamic-object></div>While cuts to the federal funds rate will make the financing of construction projects more affordable, uncertainty about raw material prices and labor availability — due in part to immigration crackdowns — may keep activity from rebounding as strongly as we would expect under conditions where the Federal Open Market Committee is loosening monetary policy. Manufacturing demand likewise remains muted, with seasonally adjusted new orders aggregated across five Federal Reserve banks falling back into contraction in November. Historically, multiple months of new orders exceeding a value of 7.5 on this index have preceded turns in truckload pricing dynamics in carriers’ favor within a few months. In contrast, sharp falls in this index have accurately predicted weakening market conditions. <h3>Economic uncertainty could dull impact of rate cuts </h3>Interest rate cuts should spur demand for manufactured goods, but elevated economic policy uncertainty can mute the demand-generating impact of interest rate cuts. Likewise, the Institute for Supply Management’s separate <a href="https://www.ismworld.org/supply-management-news-and-reports/reports/ism-pmi-reports/pmi/november/">manufacturing survey</a> continues to suggest weak conditions at US plants. One sector likely to see continued strong demand through 2026 is the construction of data centers. Data center construction has more than doubled since 2023 and has helped counterbalance slower construction of warehouses. The need to equip data centers is further spurring demand for imported computers and electrical goods. Given weakness in other manufacturing sectors, such as paper — which generates more ton-miles of freight than transportation equipment plants — it is imperative carriers closely monitor for any signs of slowing data center construction activity. Regarding supply-side dynamics, while much has been written about heightened enforcement of English-language proficiency requirements, non-domiciled commercial drivers’ licenses and immigration enforcement of carriers in California, I remain skeptical that supply-side reductions alone will shift pricing dynamics in carriers’ favor. DAT’s most recent spot market pricing data showed that spot rates, adjusted for fuel prices, underperformed in November relative to October across dry-van, refrigerated and flatbed sectors compared with the same months in prior years. This is why demand factors will be front and center in 2026. Jason Miller is an associate professor of logistics at Michigan State University. Contact him at <a href="mailto:mill2831@broad.msu.edu">mill2831@broad.msu.edu.</a></div>

The 2025 US freight market, especially the domestic truckload sector, underperformed expectations held at this time last year. The US Bureau of Labor Statistics’ (BLS) truckload producer price index (PPI), an estimate of the prices long-haul general freight carriers receive for trucking services, was down 1.8% year over year as of September, despite diesel prices rising 5.4% in the same period. This raises the question: Why did the market underperform expectations, including my own prediction that the truckload PPI would climb between 6% and 10% year over year by late 2025? The strongest culprit for the underperformance was the Trump administration’s tariffs, and more specifically, the uncertainty created by their inconsistent implementation, with expansions and rollbacks often coming at a moment’s notice. Such uncertainty causes companies to postpone difficult-to-reverse investments, such as hiring new workers and expanding operations. Consistent with this, hiring by private employers reported by the BLS’s Job Openings and Labor Turnover Survey program has fallen to levels not seen since 2010, and manufacturing survey data on capital investment intentions aggregated across five regional Federal Reserve banks fell sharply in February after rising strongly in December 2024 and January 2025. With this in mind, I expect demand for trucking services to show limited growth in the first half of 2026, with the potential to improve in the second half. Seasonally adjusted single-family housing starts have consistently been down 7% to 11% year over year from March through August, the most recent data available, except for July. Improved housing activity has the potential to be the greatest catalyst for improved freight demand. While cuts to the federal funds rate will make the financing of construction projects more affordable, uncertainty about raw material prices and labor availability — due in part to immigration crackdowns — may keep activity from rebounding as strongly as we would expect under conditions where the Federal Open Market Committee is loosening monetary policy. Manufacturing demand likewise remains muted, with seasonally adjusted new orders aggregated across five Federal Reserve banks falling back into contraction in November. Historically, multiple months of new orders exceeding a value of 7.5 on this index have preceded turns in truckload pricing dynamics in carriers’ favor within a few months. In contrast, sharp falls in this index have accurately predicted weakening market conditions. Economic uncertainty could dull impact of rate cuts Interest rate cuts should spur demand for manufactured goods, but elevated economic policy uncertainty can mute the demand-generating impact of interest rate cuts. Likewise, the Institute for Supply Management’s separate manufacturing survey continues to suggest weak conditions at US plants. One sector likely to see continued strong demand through 2026 is the construction of data centers. Data center construction has more than doubled since 2023 and has helped counterbalance slower construction of warehouses. The need to equip data centers is further spurring demand for imported computers and electrical goods. Given weakness in other manufacturing sectors, such as paper — which generates more ton-miles of freight than transportation equipment plants — it is imperative carriers closely monitor for any signs of slowing data center construction activity. Regarding supply-side dynamics, while much has been written about heightened enforcement of English-language proficiency requirements, non-domiciled commercial drivers’ licenses and immigration enforcement of carriers in California, I remain skeptical that supply-side reductions alone will shift pricing dynamics in carriers’ favor. DAT’s most recent spot market pricing data showed that spot rates, adjusted for fuel prices, underperformed in November relative to October across dry-van, refrigerated and flatbed sectors compared with the same months in prior years. This is why demand factors will be front and center in 2026. Jason Miller is an associate professor of logistics at Michigan State University. Contact him at mill2831@broad.msu.edu.

Supply chain

‘Imperative’ that truckload carriers watch for any slowing in data center activity

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