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<div class="phx-topic abstract-wrapper">While spot rates are easing in some markets, Hapag-Lloyd said the second half of the year is likely to exceed previous expectations based on current performance.</div>

While spot rates are easing in some markets, Hapag-Lloyd said the second half of the year is likely to exceed previous expectations based on current performance.

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<div>Hapag-Lloyd is expecting a strong second half of the year after reporting a nearly three-fold increase in H1 interim net profit to a record $9.5 billion as freight rates soared 77 percent in the period, the carrier said Thursday. Hapag-Lloyd said the current strained global supply chains should improve as vessel bottlenecks ease after this year's peak season. While spot rates are easing in some markets, especially China to Europe and the US, Hapag-Lloyd said based on current performance, the second half is also likely to exceed previous expectations. The carrier raised its full-year forecast for group earnings before interest,...

Hapag-Lloyd is expecting a strong second half of the year after reporting a nearly three-fold increase in H1 interim net profit to a record $9.5 billion as freight rates soared 77 percent in the period, the carrier said Thursday. Hapag-Lloyd said the current strained global supply chains should improve as vessel bottlenecks ease after this year's peak season. While spot rates are easing in some markets, especially China to Europe and the US, Hapag-Lloyd said based on current performance, the second half is also likely to exceed previous expectations. The carrier raised its full-year forecast for group earnings before interest, taxes, depreciation, and amortization (EBITDA) on July 28 to between $19.5 billion and $21.5 billion . Spot rates from Shanghai to the US West Coast have dropped to $6,499 per FEU, according to the last weekly update of the China Containerized Freight Index (CCFI) on Aug. 5, down from about $7,000 per FEU in early July. CCFI rates from Shanghai to North Europe have fallen to $5,166 per TEU from about $5,600 per TEU in the same period. Lars Jensen, head of marine consultancy Vespucci Maritime and a JOC analyst, said Hapag-Lloyd's average freight rate was much higher than benchmark indices. “This is essentially the same as seen with Maersk and shows the impact of the increasing contract rates in 2022 even though spot rates have been declining,” Jensen wrote in a LinkedIn commentary Thursday . Hapag-Lloyd said total revenues surged to $18.6 billion in the first half, from $10.6 billion a year earlier. That was mainly due to higher average freight rates that climbed to $2,866 per TEU from $1,612 per TEU in the first half of last year even while volumes were flat at 6 million TEU. Global bank HSBC in January forecast container shipping profitability will exceed $163 billion this year , while Drewry’s industry estimate is for carrier earnings of $200 billion. Contact Special Correspondent Keith Wallis at keithwallis@hotmail.com .

Container lines

Hapag-Lloyd sees strong H2 after record $9.5 billion H1 profit

<div class="phx-topic abstract-wrapper">As the diversions away from the Suez Canal have shown over the past two years, global shipping is often at the mercy of global hotspots, writes Ted Prince.</div>

As the diversions away from the Suez Canal have shown over the past two years, global shipping is often at the mercy of global hotspots, writes Ted Prince.

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<div class="phx-topic">Political science has been front of mind for many of us in the international maritime transportation industry as trade deals become enmeshed in tariffs and other policy matters. While the trans-Pacific remains the primary route for Asia-to-US West Coast cargo, the question of routing alternatives is at an all-time high. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6157386_0.1.jpg"></img></div>Starting in 2023, military activity by Houthi militants in the Red Sea and Gulf of Aden targeted commercial vessels and created a direct challenge to Suez Canal transits. This route from Asia to the US East Coast had seen significant growth with the deployment of mega-vessels within alliances utilizing slow steaming. Twenty years ago, conventional wisdom established Singapore as the fulcrum for east-west deployment. It was hard to imagine that Suez services would start in China; however, that is what happened. The Houthi threat resulted in most carriers rerouting from the Suez Canal to the Cape of Good Hope around southern Africa. This added up to two weeks in transit and resulted in almost all spare capacity being absorbed. While there has been some discussion of Suez transits resuming, the political instability in Iran has caused some hesitation because of the knock-on risks to crew and cargo. The Suez route now has a theoretical challenge from the Northern Sea Route – which is estimated to be 20% to 40% shorter than the Suez. It could reduce transit time by weeks, but still has significant seasonality concerns. Even summer and autumn transits require icebreaker escorts, although navigability is increasing with Arctic warming. Donald Trump’s focus on Greenland has certainly raised the stakes here. Likewise, with the Panama Canal. In his Jan. 20, 2025, inaugural address, Trump stated his intention to “take back” the Panama Canal, especially from alleged Chinese port control. That political pressure no doubt helped push CK Hutchison to arrange the sale of its extensive marine terminal portfolio to a consortium led by US investors (BlackRock/Global Infrastructure Partners, along with Mediterranean Shipping Co./Terminal Investment Limited) less than two months later for roughly $22.8 billion. Since then, political contention between the US, Panama and China has complicated the deal so its status remains unresolved at present. <h3>Costly alternatives </h3>Among these “canal conundrums,” there is no shortage of ideas seeking to provide alternative routings: 1) The Kra (or Thai) Canal, a waterway across Thailand's Kra Isthmus, connecting the Gulf of Thailand (Pacific Ocean) to the Andaman Sea (Indian Ocean), has been under consideration, literally for centuries. It would be bypassing the Strait of Malacca to shorten shipping routes between East Asia and the Suez Canal. 2) A canal transiting Nicaragua (Nicaragua Canal or Grand Oceanic Canal) has been considered for almost as long (as early as 1825.) Both have been considered within the scope of China’s Belt and Road initiative; however, astronomical costs along with political and environmental hurdles make these likely to remain on the drawing board for some time. Finally, intermodal options have been proposed across southern Mexico (The Interoceanic Corridor of the Isthmus of Tehuantepec); Honduras (National Interoceanic Railway); and Nicaragua (Canal Interoceanico de Nicaragua). These also present multi-billion price tags and seek to replicate what already exists with the Panama Canal Railroad – which is owned by APM Terminals. There is no question that we live in increasingly turbulent political times. However, for the time being, it seems that we will continue to live in a world where the three main vessel routing alternatives will remain in place. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com.</a></div>

Political science has been front of mind for many of us in the international maritime transportation industry as trade deals become enmeshed in tariffs and other policy matters. While the trans-Pacific remains the primary route for Asia-to-US West Coast cargo, the question of routing alternatives is at an all-time high. Starting in 2023, military activity by Houthi militants in the Red Sea and Gulf of Aden targeted commercial vessels and created a direct challenge to Suez Canal transits. This route from Asia to the US East Coast had seen significant growth with the deployment of mega-vessels within alliances utilizing slow steaming. Twenty years ago, conventional wisdom established Singapore as the fulcrum for east-west deployment. It was hard to imagine that Suez services would start in China; however, that is what happened. The Houthi threat resulted in most carriers rerouting from the Suez Canal to the Cape of Good Hope around southern Africa. This added up to two weeks in transit and resulted in almost all spare capacity being absorbed. While there has been some discussion of Suez transits resuming, the political instability in Iran has caused some hesitation because of the knock-on risks to crew and cargo. The Suez route now has a theoretical challenge from the Northern Sea Route – which is estimated to be 20% to 40% shorter than the Suez. It could reduce transit time by weeks, but still has significant seasonality concerns. Even summer and autumn transits require icebreaker escorts, although navigability is increasing with Arctic warming. Donald Trump’s focus on Greenland has certainly raised the stakes here. Likewise, with the Panama Canal. In his Jan. 20, 2025, inaugural address, Trump stated his intention to “take back” the Panama Canal, especially from alleged Chinese port control. That political pressure no doubt helped push CK Hutchison to arrange the sale of its extensive marine terminal portfolio to a consortium led by US investors (BlackRock/Global Infrastructure Partners, along with Mediterranean Shipping Co./Terminal Investment Limited) less than two months later for roughly $22.8 billion. Since then, political contention between the US, Panama and China has complicated the deal so its status remains unresolved at present. Costly alternatives Among these “canal conundrums,” there is no shortage of ideas seeking to provide alternative routings: 1) The Kra (or Thai) Canal, a waterway across Thailand's Kra Isthmus, connecting the Gulf of Thailand (Pacific Ocean) to the Andaman Sea (Indian Ocean), has been under consideration, literally for centuries. It would be bypassing the Strait of Malacca to shorten shipping routes between East Asia and the Suez Canal. 2) A canal transiting Nicaragua (Nicaragua Canal or Grand Oceanic Canal) has been considered for almost as long (as early as 1825.) Both have been considered within the scope of China’s Belt and Road initiative; however, astronomical costs along with political and environmental hurdles make these likely to remain on the drawing board for some time. Finally, intermodal options have been proposed across southern Mexico (The Interoceanic Corridor of the Isthmus of Tehuantepec); Honduras (National Interoceanic Railway); and Nicaragua (Canal Interoceanico de Nicaragua). These also present multi-billion price tags and seek to replicate what already exists with the Panama Canal Railroad – which is owned by APM Terminals. There is no question that we live in increasingly turbulent political times. However, for the time being, it seems that we will continue to live in a world where the three main vessel routing alternatives will remain in place. Ted Prince is founder and CEO of Tri-Cities Intermodal LLC. Contact him at ted@tricitiesintermodal.com.

Geopolitical risks prompt thoughts of supply chain routing alternatives

<div class="phx-topic abstract-wrapper">Expansion of two container terminals and construction of a new 200-acre facility to be called Pier 500 will help the port retain its position as the largest US gateway, Executive Director Gene Seroka said in his State of the Port address Thursday.</div>

Expansion of two container terminals and construction of a new 200-acre facility to be called Pier 500 will help the port retain its position as the largest US gateway, Executive Director Gene Seroka said in his State of the Port address Thursday.

<div class="phx-topic">The Port of Los Angeles will expand two existing container terminals and develop an 89-acre chassis operations facility, it announced Thursday. That is in addition to building a new 200-acre container terminal, a project that was announced last year. In order to retain its position as the largest US container port and accommodate growth, Los Angeles must expand its infrastructure and enable port stakeholders to operate more efficiently using technology, Gene Seroka, the port’s executive director, said in his State of the Port address. “We must build bigger and we must build smarter: bigger capacity, smarter technology, increased sustainability,” Seroka said. The terminal expansion projects include development of a 40-acre site adjacent to Pier 300 and upgrading the LA Til container terminal in the port’s West Basin. The port also plans to develop 80 acres of under-utilized land on Terminal Island into a maritime support facility for chassis parking and maintenance as well as for container pickups and dropoffs, Seroka said. The port last October released a request for proposals to evaluate the interest in and feasibility of constructing a 200-acre facility to be called the Pier 500 Marine Container Terminal, which would include 3,000 linear feet of wharf space and two berths. Pier 500, to be developed on landfill, would be the first new container terminal built in Los Angeles in a generation, Seroka said. The project is projected to be completed in 10 years once construction begins. That is <a href="https://www.joc.com/article/port-of-los-angeles-looks-to-handle-future-growth-with-new-terminal-project-6091694">faster than most new terminals built on landfill</a> because over the past 20 years, rocks removed during other construction projects have been dumped on the 124-acre landfill site, raising it to about 15 feet below the water line. Seroka said the port is in final discussions with Fenix Maritime Services, which operates Pier 300, to develop 40 acres of vacant land adjacent to the 300-acre terminal. The plan would be to add another berth and develop the site for terminal-related operations. Los Angeles will soon be issuing an environmental impact report for the LA Til Container Terminal to upgrade the wharf and rail yard to accommodate larger container ships, Seroka said. The Los Angeles-Long Beach port complex is operating at about 60% capacity utilization, which is a far cry <a href="https://www.joc.com/article/more-data-sharing-crucial-to-avoiding-future-port-congestion-officials-6135162">from the 90%-plus utilization rate</a> during the post-pandemic cargo surge that resulted in vessel backlogs and marine terminal congestion. However, with a projected doubling of container volumes in the port complex by 2040, the expansion projects should ensure that Los Angeles is well-positioned to handle future growth as well as the next generation of container vessels, Seroka said in his address. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="d8f25580-ea17-41e6-be9c-497d1aa8fba5"></dynamic-object></div>Los Angeles last year handled 10.2 million TEUs of laden and empty containers, which was its third-busiest year, he said. The port handled 4.86 million TEUs of container imports from Asia last year, down 0.7% from 2024 but still the most among all US ports, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. Long Beach was second with 4.56 million TEUs. <h3>Building a new bridge still possible </h3>Meanwhile, re-decking of the Vincent Thomas Bridge at the entry to the Port of Los Angeles, which will begin in the coming months, will make the bridge safer for the 50,000 vehicles that cross it daily, Seroka said. “But here’s the bigger issue. <a href="https://www.joc.com/article/la-port-wants-california-to-raise-bridge-to-accommodate-big-ships-6087396">We also need to raise or replace it to unlock our full terminal capacity north of the bridge</a>. We pushed to do both together,” he said. “That timeline simply didn’t work, but this issue is not going away. We’re working with the governor’s office and California transportation officials to explore all options — which could include building a new crossing.” The port continues to expand and improve its technology-driven programs, including the Port Optimizer to project container volumes in a three-week window, and the Universal Truck Appointment System which has improved gate usage at marine terminals by 20%, Seroka said. “Building smarter also means investing in technology that powers everything we do,” he said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>.</div>

The Port of Los Angeles will expand two existing container terminals and develop an 89-acre chassis operations facility, it announced Thursday. That is in addition to building a new 200-acre container terminal, a project that was announced last year. In order to retain its position as the largest US container port and accommodate growth, Los Angeles must expand its infrastructure and enable port stakeholders to operate more efficiently using technology, Gene Seroka, the port’s executive director, said in his State of the Port address. “We must build bigger and we must build smarter: bigger capacity, smarter technology, increased sustainability,” Seroka said. The terminal expansion projects include development of a 40-acre site adjacent to Pier 300 and upgrading the LA Til container terminal in the port’s West Basin. The port also plans to develop 80 acres of under-utilized land on Terminal Island into a maritime support facility for chassis parking and maintenance as well as for container pickups and dropoffs, Seroka said. The port last October released a request for proposals to evaluate the interest in and feasibility of constructing a 200-acre facility to be called the Pier 500 Marine Container Terminal, which would include 3,000 linear feet of wharf space and two berths. Pier 500, to be developed on landfill, would be the first new container terminal built in Los Angeles in a generation, Seroka said. The project is projected to be completed in 10 years once construction begins. That is faster than most new terminals built on landfill because over the past 20 years, rocks removed during other construction projects have been dumped on the 124-acre landfill site, raising it to about 15 feet below the water line. Seroka said the port is in final discussions with Fenix Maritime Services, which operates Pier 300, to develop 40 acres of vacant land adjacent to the 300-acre terminal. The plan would be to add another berth and develop the site for terminal-related operations. Los Angeles will soon be issuing an environmental impact report for the LA Til Container Terminal to upgrade the wharf and rail yard to accommodate larger container ships, Seroka said. The Los Angeles-Long Beach port complex is operating at about 60% capacity utilization, which is a far cry from the 90%-plus utilization rate during the post-pandemic cargo surge that resulted in vessel backlogs and marine terminal congestion. However, with a projected doubling of container volumes in the port complex by 2040, the expansion projects should ensure that Los Angeles is well-positioned to handle future growth as well as the next generation of container vessels, Seroka said in his address. Los Angeles last year handled 10.2 million TEUs of laden and empty containers, which was its third-busiest year, he said. The port handled 4.86 million TEUs of container imports from Asia last year, down 0.7% from 2024 but still the most among all US ports, according to PIERS, a sister product of the Journal of Commerce within S&P Global. Long Beach was second with 4.56 million TEUs. Building a new bridge still possible Meanwhile, re-decking of the Vincent Thomas Bridge at the entry to the Port of Los Angeles, which will begin in the coming months, will make the bridge safer for the 50,000 vehicles that cross it daily, Seroka said. “But here’s the bigger issue. We also need to raise or replace it to unlock our full terminal capacity north of the bridge . We pushed to do both together,” he said. “That timeline simply didn’t work, but this issue is not going away. We’re working with the governor’s office and California transportation officials to explore all options — which could include building a new crossing.” The port continues to expand and improve its technology-driven programs, including the Port Optimizer to project container volumes in a three-week window, and the Universal Truck Appointment System which has improved gate usage at marine terminals by 20%, Seroka said. “Building smarter also means investing in technology that powers everything we do,” he said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Container Shipping News

Port of Los Angeles forging ahead with aggressive construction program 

<div class="phx-topic abstract-wrapper">Tighter capacity amid the federal government’s crackdown on non-domiciled commercial driver’s licenses and English language proficiency among drivers will likely boost rates, the company says.</div>

Tighter capacity amid the federal government’s crackdown on non-domiciled commercial driver’s licenses and English language proficiency among drivers will likely boost rates, the company says.

<div class="phx-topic">Truckload shippers should expect their annual contract rates to rise by low-to mid-single-digit percentages due to the likelihood of tighter capacity this year, according to Knight-Swift Transportation. Negotiations are ongoing or about to begin with many truckload customers. The company said the momentum that propelled rates upward in December had trickled into the first couple of weeks of January, while more shippers are shifting their business from non-asset brokers to asset-based carriers. Shippers are making the move because of uneasiness about the federal government’s crackdown on non-domiciled commercial driver’s licenses (CDLs) and English language proficiency among drivers, Knight Swift said. Shippers who have spoken to the Journal of Commerce have generally said truckload rates are rising 1.5% to 3% in their 2026 bids, although some have been able to lock in unchanged rates by switching away from incumbent carriers. “What we’d be pushing for would be low-to mid-single-digit improvements in contract rates and maybe closer to mid than low,” Knight Swift CEO Adam Miller said during the company’s fourth-quarter earnings call Wednesday. “Maybe that may not align with what our customers want to see in a pre-bid. Some of this stuff is going to go into a bid to see where the market is from a balance standpoint.” Despite what Knight Swift said was a disappointing peak season, it believes capacity is fragile, as the December spot market surge in truckload showed, and more capacity will come out this year. If a disruption occurred, or manufacturing and industrial demand pick up, then capacity might become tight quickly. Knight-Swift, similar to <a href="https://www.joc.com/article/truckload-at-a-tipping-point-intermodal-still-lagging-jb-hunt-6153949">J.B. Hunt Transport Services last week</a>, was careful not to call the end of the freight recession. “We’ve seen head fakes before, but I think we’re feeling better about where this market is headed,” Miller said. “And we do feel better about what the [US Department of Transportation] is doing to clean up capacity in our industry.” The US Department of Transportation and Federal Motor Carrier Safety Administration, a sub-agency, have cracked down on non-domiciled CDLs issued to non-citizens who have certain types of visas, including asylum seekers. Miller also pointed out that temporary protective status is ending for countries such as Ethiopia, Haiti, and Somalia, which would disqualify those drivers from continuing to operate a truck here. “Also, there were 3,000 [driving] schools recently removed because of noncompliance and another 4,000 schools that have placed on notice for noncompliance,” Miller said. “Two of our schools at Swift were audited, and we passed with flying colors, as we’d expect. So, it is real. It is happening.” <h3>Consolidating LTL business </h3>Knight Swift said it saw some “softness” in less-than-truckload (LTL) demand toward the end of the fourth quarter. The company’s emphasis in 2026 is uniting all its LTL businesses under one brand, AAA Cooper Transportation. When Knight Swift started its LTL division in July 2021, it kept the AAA Cooper and Midwest Motor Express brands separate. It continued to keep the brands separate when acquiring the LTL division of Dependable Highway Express in 2024. Nevertheless, it has reversed course because the company believes it has caused confusion among existing and potential LTL shippers. “We had integrated systems from a back-end perspective between the three businesses that we have combined, [but] it was creating confusion in our sales efforts,” Miller said. “We’ve already seen [a united brand] really help us in our sales efforts to present a single face to our customers and get them comfortable with our ability to deliver across our network in a way that meets their needs.” The company’s intermodal volumes decreased 6% year over year in the fourth quarter, but revenue per load rose 2.8%. Nevertheless, the company highlighted that the division’s operating ratio was 100.1%, still losing money, but only barely, after years of significant operating losses in the business. Swift Intermodal and Hub Group are the two companies who would most benefit if federal regulators approved a deal for Union Pacific Railroad to acquire Norfolk Southern Railway. They are the only two asset-owning intermodal providers in the US who are already exclusive partners to both railroads, making any transition in 2027 relatively seamless. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

Truckload shippers should expect their annual contract rates to rise by low-to mid-single-digit percentages due to the likelihood of tighter capacity this year, according to Knight-Swift Transportation. Negotiations are ongoing or about to begin with many truckload customers. The company said the momentum that propelled rates upward in December had trickled into the first couple of weeks of January, while more shippers are shifting their business from non-asset brokers to asset-based carriers. Shippers are making the move because of uneasiness about the federal government’s crackdown on non-domiciled commercial driver’s licenses (CDLs) and English language proficiency among drivers, Knight Swift said. Shippers who have spoken to the Journal of Commerce have generally said truckload rates are rising 1.5% to 3% in their 2026 bids, although some have been able to lock in unchanged rates by switching away from incumbent carriers. “What we’d be pushing for would be low-to mid-single-digit improvements in contract rates and maybe closer to mid than low,” Knight Swift CEO Adam Miller said during the company’s fourth-quarter earnings call Wednesday. “Maybe that may not align with what our customers want to see in a pre-bid. Some of this stuff is going to go into a bid to see where the market is from a balance standpoint.” Despite what Knight Swift said was a disappointing peak season, it believes capacity is fragile, as the December spot market surge in truckload showed, and more capacity will come out this year. If a disruption occurred, or manufacturing and industrial demand pick up, then capacity might become tight quickly. Knight-Swift, similar to J.B. Hunt Transport Services last week , was careful not to call the end of the freight recession. “We’ve seen head fakes before, but I think we’re feeling better about where this market is headed,” Miller said. “And we do feel better about what the [US Department of Transportation] is doing to clean up capacity in our industry.” The US Department of Transportation and Federal Motor Carrier Safety Administration, a sub-agency, have cracked down on non-domiciled CDLs issued to non-citizens who have certain types of visas, including asylum seekers. Miller also pointed out that temporary protective status is ending for countries such as Ethiopia, Haiti, and Somalia, which would disqualify those drivers from continuing to operate a truck here. “Also, there were 3,000 [driving] schools recently removed because of noncompliance and another 4,000 schools that have placed on notice for noncompliance,” Miller said. “Two of our schools at Swift were audited, and we passed with flying colors, as we’d expect. So, it is real. It is happening.” Consolidating LTL business Knight Swift said it saw some “softness” in less-than-truckload (LTL) demand toward the end of the fourth quarter. The company’s emphasis in 2026 is uniting all its LTL businesses under one brand, AAA Cooper Transportation. When Knight Swift started its LTL division in July 2021, it kept the AAA Cooper and Midwest Motor Express brands separate. It continued to keep the brands separate when acquiring the LTL division of Dependable Highway Express in 2024. Nevertheless, it has reversed course because the company believes it has caused confusion among existing and potential LTL shippers. “We had integrated systems from a back-end perspective between the three businesses that we have combined, [but] it was creating confusion in our sales efforts,” Miller said. “We’ve already seen [a united brand] really help us in our sales efforts to present a single face to our customers and get them comfortable with our ability to deliver across our network in a way that meets their needs.” The company’s intermodal volumes decreased 6% year over year in the fourth quarter, but revenue per load rose 2.8%. Nevertheless, the company highlighted that the division’s operating ratio was 100.1%, still losing money, but only barely, after years of significant operating losses in the business. Swift Intermodal and Hub Group are the two companies who would most benefit if federal regulators approved a deal for Union Pacific Railroad to acquire Norfolk Southern Railway. They are the only two asset-owning intermodal providers in the US who are already exclusive partners to both railroads, making any transition in 2027 relatively seamless. Contact Ari Ashe at ari.ashe@spglobal.com .

Trucking News

Truckload

Surface

Shippers will see rates climb as truckload capacity tightens: Knight Swift

<div class="phx-topic abstract-wrapper">The LNG market is cementing its position as the alternative fuel of choice for the container shipping industry with significant expansion in ship orders and global bunkering infrastructure, a SEA-LNG report has found.</div>

The LNG market is cementing its position as the alternative fuel of choice for the container shipping industry with significant expansion in ship orders and global bunkering infrastructure, a SEA-LNG report has found.

<div class="phx-topic">Ocean carriers operating and ordering liquefied natural gas (LNG)-capable vessels are effectively “inoculating” themselves against ongoing regulatory uncertainty, according to industry coalition SEA-LNG. The shift to LNG as an interim alternative fuel reduces emissions to comply with European Union rules and has a lower cost of compliance with EU regulations and potential future decarbonization regulations from the International Maritime Organization (IMO) compared with alternative fuels, SEA-LNG noted in its “View from the Bridge” report released this week. “It is clear LNG is on a runway to the future,” Peter Keller, chairman of SEA-LNG, told the Journal of Commerce in London following publication of the report. "Most of the alternative fuel ships in the container shipping order book are LNG-capable and our direction could not be clearer.” Despite uncertainties caused by the IMO’s decision to delay the adoption of its net-zero framework, the container shipping industry has continued to invest heavily in dual-fuel vessels and bunkering infrastructure. The swelling order book growth in 2025 was dominated by the container sector, which accounted for 88% of LNG dual-fuel orders, with 61% of those orders for vessels with a capacity of 14,500 to 24,000 TEUs. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e8be4ac1-33cb-4758-93c4-1d0f92f52e7d"></dynamic-object></div>Data from Sea-web, a sister company of the Journal of Commerce within S&amp;P Global, shows that just over 4 million TEUs of capacity for LNG dual-fuel ships was on order in 2025, compared with 2 million TEUs of methanol-capable vessels. The SEA-LNG report estimated that investment in LNG dual-fuel vessels and associated fuel supply chains over the past 10 years has amounted to more than $150 billion. A large portion of that is going into the supply side, with fuel availability at scale crucial for the global shipping industry. <h3>Surge in European demand </h3>The report said bunkering of liquefied biomethane has surged in Europe over the past year, driven by increasingly stringent EU regulations and voluntary, customer-related commitments. “Demand for LNG as a marine fuel has grown significantly over the past year, driven not only by regulatory developments like FuelEU Maritime but also by the growth of the LNG dual-fuel fleet,” Michael Schaap, commercial director of Titan Clean Fuels, said in the report. In 2024, the LNG market size was about 406 million metric tons, or approximately 100 times the current consumption of LNG as a marine fuel, the report noted. There is over 1 billion metric tons per annum of LNG import terminal capacity with terminals in or near all major bunkering ports. As demand from shipping grows for green methane, biomethane and e-methane, their production facilities can plug into the existing infrastructure. LNG bunkering is currently available in 222 ports worldwide, with plans underway to add a further 622. By the end of 2025, there were 62 LNG bunker vessels operating in hubs such as Rotterdam, Zeebrugge, Barcelona, Singapore, Shanghai, and the US East Coast, and 38 LNG bunker vessels on order. Shell is forecasting an LNG bunker market size of more than 15 million metric tons per annum by 2030, driven by the rapid growth in the LNG dual-fuel fleet and projected declines in LNG prices. Future LNG prices are forecast to drop with approximately 170 million metric tons per annum of new liquefaction capacity coming on stream by 2030, representing about a 42% increase in LNG supply. Regulatory uncertainty reached a head in October last year when the IMO decided to <a href="https://www.joc.com/article/imo-punts-on-pivotal-net-zero-shipping-regulation-6099141">postpone the adoption of its global net-zero framework</a> for a year following robust US-led opposition to the proposed pricing and fuel intensity measures. The IMO will focus on building consensus around its net-zero framework this year before a reconvened Marine Environment Protection Committee meets in October to finalize the legally binding measures. While many member states and non-governmental groups were frustrated, the SEA-LNG report said the delay offered an opportunity for the IMO to find the right way forward. “We need certainty because without that we risk other components getting in the way,” SEA-LNG's Keller told the Journal of Commerce. “Regulations can bring unintended consequences, especially when you are dealing with 176 countries that all have their own ideas of what should be in the regulations.” <h3>Avoiding double compliance costs </h3>The SEA-LNG report called on the IMO to ensure a single global decarbonization framework for maritime, with any local or regional regulations converging with IMO regulations to avoid double compliance costs. The industry coalition wants the net-zero framework to be based on regulations that were goal-based and technology-neutral, protecting first movers and incentivizing solutions that were practical, scalable and investable. “If the IMO makes any fuel prescriptive it could hurt the early movers and we don’t want that,” Keller said. The SEA-LNG report also addressed “methane slip” from ships under power from LNG and “fugitive emissions” in the LNG supply chain, with climate activists pointing out that methane from fossil LNG is a far more potent greenhouse gas than CO2 emissions. SEA-LNG said methane slip had to be resolved if LNG was going to become a long-term and viable solution toward net-zero, and the coalition and other industry groups were making progress in addressing the issue. The report stated that across the global LNG fueled fleet, methane slip in the latest low-pressure engine technologies had fallen by 60% and would be resolved by 2030. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Ocean carriers operating and ordering liquefied natural gas (LNG)-capable vessels are effectively “inoculating” themselves against ongoing regulatory uncertainty, according to industry coalition SEA-LNG. The shift to LNG as an interim alternative fuel reduces emissions to comply with European Union rules and has a lower cost of compliance with EU regulations and potential future decarbonization regulations from the International Maritime Organization (IMO) compared with alternative fuels, SEA-LNG noted in its “View from the Bridge” report released this week. “It is clear LNG is on a runway to the future,” Peter Keller, chairman of SEA-LNG, told the Journal of Commerce in London following publication of the report. "Most of the alternative fuel ships in the container shipping order book are LNG-capable and our direction could not be clearer.” Despite uncertainties caused by the IMO’s decision to delay the adoption of its net-zero framework, the container shipping industry has continued to invest heavily in dual-fuel vessels and bunkering infrastructure. The swelling order book growth in 2025 was dominated by the container sector, which accounted for 88% of LNG dual-fuel orders, with 61% of those orders for vessels with a capacity of 14,500 to 24,000 TEUs. Data from Sea-web, a sister company of the Journal of Commerce within S&P Global, shows that just over 4 million TEUs of capacity for LNG dual-fuel ships was on order in 2025, compared with 2 million TEUs of methanol-capable vessels. The SEA-LNG report estimated that investment in LNG dual-fuel vessels and associated fuel supply chains over the past 10 years has amounted to more than $150 billion. A large portion of that is going into the supply side, with fuel availability at scale crucial for the global shipping industry. Surge in European demand The report said bunkering of liquefied biomethane has surged in Europe over the past year, driven by increasingly stringent EU regulations and voluntary, customer-related commitments. “Demand for LNG as a marine fuel has grown significantly over the past year, driven not only by regulatory developments like FuelEU Maritime but also by the growth of the LNG dual-fuel fleet,” Michael Schaap, commercial director of Titan Clean Fuels, said in the report. In 2024, the LNG market size was about 406 million metric tons, or approximately 100 times the current consumption of LNG as a marine fuel, the report noted. There is over 1 billion metric tons per annum of LNG import terminal capacity with terminals in or near all major bunkering ports. As demand from shipping grows for green methane, biomethane and e-methane, their production facilities can plug into the existing infrastructure. LNG bunkering is currently available in 222 ports worldwide, with plans underway to add a further 622. By the end of 2025, there were 62 LNG bunker vessels operating in hubs such as Rotterdam, Zeebrugge, Barcelona, Singapore, Shanghai, and the US East Coast, and 38 LNG bunker vessels on order. Shell is forecasting an LNG bunker market size of more than 15 million metric tons per annum by 2030, driven by the rapid growth in the LNG dual-fuel fleet and projected declines in LNG prices. Future LNG prices are forecast to drop with approximately 170 million metric tons per annum of new liquefaction capacity coming on stream by 2030, representing about a 42% increase in LNG supply. Regulatory uncertainty reached a head in October last year when the IMO decided to postpone the adoption of its global net-zero framework for a year following robust US-led opposition to the proposed pricing and fuel intensity measures. The IMO will focus on building consensus around its net-zero framework this year before a reconvened Marine Environment Protection Committee meets in October to finalize the legally binding measures. While many member states and non-governmental groups were frustrated, the SEA-LNG report said the delay offered an opportunity for the IMO to find the right way forward. “We need certainty because without that we risk other components getting in the way,” SEA-LNG's Keller told the Journal of Commerce. “Regulations can bring unintended consequences, especially when you are dealing with 176 countries that all have their own ideas of what should be in the regulations.” Avoiding double compliance costs The SEA-LNG report called on the IMO to ensure a single global decarbonization framework for maritime, with any local or regional regulations converging with IMO regulations to avoid double compliance costs. The industry coalition wants the net-zero framework to be based on regulations that were goal-based and technology-neutral, protecting first movers and incentivizing solutions that were practical, scalable and investable. “If the IMO makes any fuel prescriptive it could hurt the early movers and we don’t want that,” Keller said. The SEA-LNG report also addressed “methane slip” from ships under power from LNG and “fugitive emissions” in the LNG supply chain, with climate activists pointing out that methane from fossil LNG is a far more potent greenhouse gas than CO2 emissions. SEA-LNG said methane slip had to be resolved if LNG was going to become a long-term and viable solution toward net-zero, and the coalition and other industry groups were making progress in addressing the issue. The report stated that across the global LNG fueled fleet, methane slip in the latest low-pressure engine technologies had fallen by 60% and would be resolved by 2030. Contact Greg Knowler at greg.knowler@spglobal.com .

Clear direction set for LNG amid ongoing regulatory uncertainty: industry group 

<div class="phx-topic abstract-wrapper">The feeling that an arms race for bigger ships and a rush for alternative fuels has overtaken purely rational decision making is strong, writes Jeremy Masters.</div>

The feeling that an arms race for bigger ships and a rush for alternative fuels has overtaken purely rational decision making is strong, writes Jeremy Masters.

<div class="phx-topic">If you look at Alphaliner’s data on the cellular newbuilding order book, there are some striking numbers at both ends of the spectrum. The most obvious place to start is the 18,000- to 24,000-TEU range because that is where the biggest impacts are made in overall capacity injection, and there are multiple knock-on effects through cascading. According to Alphaliner in December, the total TEUs on order in the 18,000- to 24,000-TEU range as a percentage of the existing fleet size was a staggering 81%. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6156554_0.1.jpg"></img></div>If we look at where 18,000- to 24,000-TEU ships are deployed today, based on the capability to handle the vessels, the biggest concentration by far is in the Far East to North Europe and Mediterranean lanes. Given that the trade is already tending to an oversupply position, even just upgrading existing loops is going to severely test the limits of absorption. A return to Suez routing — and thus fewer ships required for the same weekly services — would seem to guarantee a severe overhang of capacity. Given this reality, some of the carriers’ options are: 1.	Tying up whole strings of expensive high-spec ships versus tinkering with blank sailings. This is a tough call, but the economics stack up if the supply/demand position moves enough in favor of the carriers and rates can be significantly increased. 2.	Retaining some loops around the Cape of Good Hope is a justifiable reaction to an unpredictable Middle East situation and would indeed be welcomed by a portion of clients not wishing to be caught with all their fish in the wrong basket. 3.	Super slow-steaming is an option, but of course this will extend transit times and has the potential to create competitive problems if it is not universally applied. Ironically, a reopening of the Suez routing would allow carriers to test the limits on slow-steaming without extending clients’ transit times. 4.	Scrapping is sometimes touted by carrier executives as one of the key cures for overcapacity. But the reality is that the oldest ships are in the smaller sizes, so even if they are scrapped, the impact will not be great unless it’s on a very big scale, and those size ships are currently in great demand. Almost 1.3 million TEUs in capacity for ultra-large container ships was on order in 2025, according to Sea-web, a sister product of the Journal of Commerce within S&amp;P Global. <h3>‘Arms race’ for bigger ships? </h3>Of the options above, pulling full strings of large ships is clearly the most radical and impactful, but may be sidelined because it’s difficult to explain internally and externally could provoke a barrage of complaints and regulatory investigation. As it is likely that the other measures plus some blank sailings simply will not be enough to steer supply down to demand, the next area of attention will be expanding the number of trades where we see 18,000-plus TEU ships. Mediterranean Shipping Co.’s West Africa Express is instructive because it serves two new areas MSC has opened for big ships — West Africa and India. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="83f8b939-db16-47a4-b70a-8715aaf729ec"></dynamic-object></div>West Africa has four ports on that service, but India has only one — Vizhinjam. But there is connectivity at Vizhinjam to both local feeders and other deep-sea services (hub-and-spoke) where the spokes can be short and long. Given that there are several geographies similar to India where there are only a small number of ports able to take the very biggest ships, it could well be that the surplus of big ships creates more hub-and-spoke systems as carriers push these ships into more trades and the limited number of ports that can handle them. These may not initially be the 24,000-TEU ships that would be natural to use to upgrade European services (even if it means having fewer services), but there will be a cascading of capacity and thus a desire to deploy bigger ships in more places. If you are a port or port operator in a region where there are size constraints, there has never been a better time to positively differentiate yourself by upgrading or finding greenfield sites that can accommodate the biggest ships. The feeling that an arms race in the bigger sizes and a rush for alternative fuels has overtaken purely rational decision making is strong. That is reinforced by looking at the smaller-size ships which have been in very heavy demand, so one might expect strong newbuild ordering. Alphaliner reported in December that the order book as a percentage of existing capacity for 4,000- to 5,099-TEU ships was 10.4%, and for 5,100- to 7,499-TEU ships was 7.3%. This has gone up quite a bit in recent months but is still relatively sane. If there is a disconnect today with freight markets, it’s not as widely advertised in the charter market, but in the newbuild market. Jeremy Masters is managing director of Shipping Masters. Contact him at <a href="mailto:jeremy@shippingmastershk.com">jeremy@shippingmastershk.com</a>.</div>

If you look at Alphaliner’s data on the cellular newbuilding order book, there are some striking numbers at both ends of the spectrum. The most obvious place to start is the 18,000- to 24,000-TEU range because that is where the biggest impacts are made in overall capacity injection, and there are multiple knock-on effects through cascading. According to Alphaliner in December, the total TEUs on order in the 18,000- to 24,000-TEU range as a percentage of the existing fleet size was a staggering 81%. If we look at where 18,000- to 24,000-TEU ships are deployed today, based on the capability to handle the vessels, the biggest concentration by far is in the Far East to North Europe and Mediterranean lanes. Given that the trade is already tending to an oversupply position, even just upgrading existing loops is going to severely test the limits of absorption. A return to Suez routing — and thus fewer ships required for the same weekly services — would seem to guarantee a severe overhang of capacity. Given this reality, some of the carriers’ options are: 1. Tying up whole strings of expensive high-spec ships versus tinkering with blank sailings. This is a tough call, but the economics stack up if the supply/demand position moves enough in favor of the carriers and rates can be significantly increased. 2. Retaining some loops around the Cape of Good Hope is a justifiable reaction to an unpredictable Middle East situation and would indeed be welcomed by a portion of clients not wishing to be caught with all their fish in the wrong basket. 3. Super slow-steaming is an option, but of course this will extend transit times and has the potential to create competitive problems if it is not universally applied. Ironically, a reopening of the Suez routing would allow carriers to test the limits on slow-steaming without extending clients’ transit times. 4. Scrapping is sometimes touted by carrier executives as one of the key cures for overcapacity. But the reality is that the oldest ships are in the smaller sizes, so even if they are scrapped, the impact will not be great unless it’s on a very big scale, and those size ships are currently in great demand. Almost 1.3 million TEUs in capacity for ultra-large container ships was on order in 2025, according to Sea-web, a sister product of the Journal of Commerce within S&P Global. ‘Arms race’ for bigger ships? Of the options above, pulling full strings of large ships is clearly the most radical and impactful, but may be sidelined because it’s difficult to explain internally and externally could provoke a barrage of complaints and regulatory investigation. As it is likely that the other measures plus some blank sailings simply will not be enough to steer supply down to demand, the next area of attention will be expanding the number of trades where we see 18,000-plus TEU ships. Mediterranean Shipping Co.’s West Africa Express is instructive because it serves two new areas MSC has opened for big ships — West Africa and India. West Africa has four ports on that service, but India has only one — Vizhinjam. But there is connectivity at Vizhinjam to both local feeders and other deep-sea services (hub-and-spoke) where the spokes can be short and long. Given that there are several geographies similar to India where there are only a small number of ports able to take the very biggest ships, it could well be that the surplus of big ships creates more hub-and-spoke systems as carriers push these ships into more trades and the limited number of ports that can handle them. These may not initially be the 24,000-TEU ships that would be natural to use to upgrade European services (even if it means having fewer services), but there will be a cascading of capacity and thus a desire to deploy bigger ships in more places. If you are a port or port operator in a region where there are size constraints, there has never been a better time to positively differentiate yourself by upgrading or finding greenfield sites that can accommodate the biggest ships. The feeling that an arms race in the bigger sizes and a rush for alternative fuels has overtaken purely rational decision making is strong. That is reinforced by looking at the smaller-size ships which have been in very heavy demand, so one might expect strong newbuild ordering. Alphaliner reported in December that the order book as a percentage of existing capacity for 4,000- to 5,099-TEU ships was 10.4%, and for 5,100- to 7,499-TEU ships was 7.3%. This has gone up quite a bit in recent months but is still relatively sane. If there is a disconnect today with freight markets, it’s not as widely advertised in the charter market, but in the newbuild market. Jeremy Masters is managing director of Shipping Masters. Contact him at jeremy@shippingmastershk.com .

Could the ocean carrier order book be a matter of ‘irrational exuberance’?

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