<div class="phx-topic abstract-wrapper">How the reduced capacity meets slowing US import volume, which will be reflected in weekly spot rates, will give a preliminary picture of what to expect in supply and demand for the coming year.</div>

How the reduced capacity meets slowing US import volume, which will be reflected in weekly spot rates, will give a preliminary picture of what to expect in supply and demand for the coming year.

3592371_FI.jpg

<div><a>Trans-Pacific</a> carriers are canceling sailings to reduce eastbound TEU capacity at a slightly higher rate than last year as they prepare for a steep drop in demand during the Lunar New Year and they position themselves for annual service contract negotiations beginning in March.How the reduced capacity meets slowing US import volume, which will be reflected in weekly spot rates, will give a preliminary picture of what to expect in supply and demand for the coming year. A clearer picture will emerge in March when carriers reveal revamped services and capacity deployments as they launch service contract negotiations with customers...

Trans-Pacific carriers are canceling sailings to reduce eastbound TEU capacity at a slightly higher rate than last year as they prepare for a steep drop in demand during the Lunar New Year and they position themselves for annual service contract negotiations beginning in March. How the reduced capacity meets slowing US import volume, which will be reflected in weekly spot rates, will give a preliminary picture of what to expect in supply and demand for the coming year. A clearer picture will emerge in March when carriers reveal revamped services and capacity deployments as they launch service contract negotiations with customers for the period May 1, 2019, to April 30, 2020. Container lines and alliances are beginning to signal how they’re approaching capacity deployment in the spring. Zim Integrated Shipping Services and 2M partners Maersk Line and Mediterranean Shipping Co. on Jan 10 announced plans to extend their partnership on the trans-Pacific from a vessel-sharing agreement (VSA) for a service to the US East Coast to one calling the west coast of Canada and the United States. According to Alphaliner, the revamped partnership, which features Zim ending its Asia-Mediterranean-US West Coast service, will likely keep capacity through the tie-up largely unchanged, thanks to the deployment of larger 2M ships to handle the Zim volume. Separately, CMA CGM and its Ocean Alliance partners Cosco Shipping, Evergeren Line, and OOCL on Wednesday said they are strengthening their tie-up with a new product dubbed Ocean Alliance Day 3, launching in April. The alliance said it will offer the largest service offering on the trans-Pacific with 19 services. While no formal offers have been made for the 2019 service contracts, carriers are said to have originally targeted contract rates of about $1,500 per FEU to the West Coast and $2,500 per FEU to the East Coast, although those numbers are said to have come down a bit recently. Carriers are also indicating that contracts should include a peak-season surcharge of about $300 per FEU, with allowances for further hikes if warranted during the busiest weeks. Click to enlarge Retailers expect US imports to weaken in the first half of 2019 due to the front-loading of shipments last autumn to get ahead of the Trump administration’s 25 percent tariffs on more than $200 billion of imports from China. US imports in calendar year 2018 increased more than 6 percent, including an exceptional increase of 21.8 percent in December over December 2017, according to PIERS, a JOC.com sister company. The cancellations that carriers announced so far include 22 blank sailings from Asia to the West Coast, which is down from the 28 blank sailings that occurred during the three-week period of Chinese New Year in 2018. Carriers so far have announced 13 blank sailings to the East Coast, up from 11 blank sailings when factories in Asia closed for the 2018 Lunar New Year. The data were compiled by SeaIntelligence and published in its Sunday Spotlight this week. When the actual reduction in TEU capacity of the 35 blank sailings is measured, the short-term impact of the blank sailings is shaping up to be about the same as during the first quarter of 2018. Last year the blank sailings removed 229,300 TEU from the Asia-West Coast route, while this year the capacity reduction will be 222,600 TEU, said Alan Murphy, CEO and partner at SeaIntelligence. This year canceled sailings will remove 127,300 TEU to the East Coast, while last year the blank sailings removed only 88,100 TEU, which indicates the ships involved this year are larger than those removed last year, Murphy said. The blank sailings will turn what had been projected to be a first quarter marked by significant overcapacity into an environment in line with the averages of recent years. Just two weeks ago, capacity to the West Coast in the first quarter of 2019 was projected to be 12.3 percent higher than in the first quarter of 2018 and 11.4 percent higher to the East Coast. Murphy said that due to the blank sailings, eastbound capacity in the first quarter is now projected to be about 6.4 percent higher than it was in the first quarter of 2018. Click to enlarge The picture is even brighter when the 2019 blank sailings are measured against the three-week average of past Lunar New Years. “As far as the current vessel deployment schedules are concerned, carriers are looking in good shape capacity-wise ahead of Chinese New Year, if previous years are used as a guide of how much needs to be blanked,” he said. During the three weeks of this year’s Lunar New Year, carriers to the West Coast already plan to remove about 48,000 additional TEU than the average TEU that was blanked during 2016-2018. Planned capacity reductions to the East Coast are 56,300 TEU higher than the average during the 2016-2018 period, he said. If the blank sailings result in only a modest drop in spot rates, carriers believe they will enter the service contracting period with enough leverage to negotiate annual contracts with at least compensatory rates. While the definition of compensatory varies, the breakeven rate for West Coast services generally falls in the range of $1,200 per FEU at the low end to $1,600 per FEU on the high end, and $2,200 to $2,600 to the East Coast. Carriers attempt to attain profitability through higher spot rates and peak-season surcharges during the busy summer-autumn months. Last November spot rates exceeded $2,500 per FEU to the West Coast and $3,700 to the East Coast. While spot rates play a role in negotiating the eastbound Pacific service contracts, the annual rates paid by steady customers are priced more so on annual supply-demand projections. Projecting total capacity on a trade lane for the peak season that is at least seven months away is difficult. IHS Markit projects that global container capacity in 2019 will increase 2.6 percent, down from a 6.2 percent increase in 2018 over 2017. However, Lawrence Burns, senior vice president of trade and sales at HMM, said vessel deployments in the eastbound Pacific will not begin to take shape until March. Based on the extreme volatility in pricing that occurred last year, carriers and shippers agree that this year their goal is to reach mutually agreeable service contract rates in May and to include in the contracts mutually agreeable peak-season surcharges in the busy summer-autumn months. Last year, fearing overcapacity, carriers agreed to what they called “disappointing” contract rates of roughly $1,200 per FEU to the West Coast and $2,200 to the East Coast. However, disruptions to the supply chain when the front-loading of merchandise began in the summer and accelerated into the autumn fed a spot-rate frenzy that saw West Coast spot rates soar from $945 per FEU in March to $2,606 in November. The East Coast spot rate surged from $1,933 per FEU in March to $3,739 in November. Neither carriers nor shippers have an appetite for such rate volatility this year. “Everybody wants to avoid it,” said Michael Klage, solutions director at TOC Logistics International. Given the fact that some peak-season surcharges last autumn approached $1,000 per FEU, carriers and shippers feel a market-based solution included in the service contracts could avoid extreme volatility during the 2019 peak season. “Ships fill up. The reality is that there are sound economic reasons for peak-season surcharges,” said Bill Rooney, vice president of strategic development at Kuehne & Nagel. Contact Bill Mongelluzzo at bill.mongelluzzo@ihsmarkit.com and follow him on Twitter:@billmongelluzzo.

Container lines

Trans-Pacific carriers accelerate blank sailings

<div class="phx-topic abstract-wrapper">A steady increase in non-seasonally adjusted trucking employment shows there’s more life in trucking than one might expect following lackluster carrier earnings reports. </div>

A steady increase in non-seasonally adjusted trucking employment shows there’s more life in trucking than one might expect following lackluster carrier earnings reports.

Feature image

<div class="phx-topic">For-hire trucking employment is growing despite weak overall US hiring, imports and industrial production, with for-hire carriers adding 7,700 jobs in July before seasonal adjustments, according to the US Bureau of Labor Statistics (BLS). The Journal of Commerce For-Hire Trucking Employment Index climbed from 100.5 in June to 101 in July and is up from 98 in February. That indicates non-seasonally adjusted trucking employment is up 1% from its average in the fourth quarter of 2018. A steady increase in non-seasonally adjusted trucking employment shows there’s more life in trucking than one might expect following lackluster carrier earnings reports. The number of real, unadjusted trucking jobs has risen every month since February, climbing higher by 45,500 employees over that six-month period, according to non-seasonally adjusted BLS data released Friday. On an annualized basis, for-hire trucking employment was up 0.4% at approximately 1.54 million jobs in July from the same month a year ago, before adjustment. The non-seasonally adjusted BLS numbers have been positive year over year since May. Even seasonally adjusted trucking job numbers rose in July, rising by 3,600, indicating stronger-than-expected growth in what’s usually a quieter month for trucking. <h3>Recovering from revision </h3>The latest data shows a continuing recovery in employment numbers after a revision by BLS found <a href="https://www.joc.com/article/revised-us-payroll-numbers-underscore-truckload-market-shift-5965577">trucking employment had been over-reported</a> in the period from 2022 through 2024, with the number of trucking employees inflated by as much as 2% to 4%. That revision pulled trucking employment numbers down to their lowest point since May 2021 at about 1.49 million employees, lower than in the pre-pandemic year of 2019. The latest revision to the BLS employment data showed hiring was slower in May and June than previously reported, and gains in July were weaker than expected. But the revision did not affect the trucking employment data. The data for the first seven months of 2025 shows a normal seasonal progression and tracks very closely with data for the same period in 2024. On a sequential monthly basis, trucking employment increased 0.6% on average since February. For-hire trucking employment is still 2.5% below its peak in August 2022, when trucking companies employed more than 1.6 million workers. Large, publicly owned truckload carriers have been more focused on cutting costs and improving vehicle utilization than adding employees to their payrolls, but they did increase their truck counts slightly in the last quarter. Schneider National, one of the largest US truckload providers, saw a net increase of 200 drivers in the second quarter, according to CEO Mark B. Rourke. Driver recruiting saw “pockets of strength” in the second quarter, Rourke told Wall Street analysts last week, as drivers working for small companies sought jobs with larger, more financially stable fleets. Nearly 9,900 motor carriers left the market between December 2024 and July, according to the Federal Motor Carrier Safety Administration (FMCSA). The number of newly registered carriers peaked in 2024 at 55,853 companies, according to FMCSA data. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. </div>

For-hire trucking employment is growing despite weak overall US hiring, imports and industrial production, with for-hire carriers adding 7,700 jobs in July before seasonal adjustments, according to the US Bureau of Labor Statistics (BLS). The Journal of Commerce For-Hire Trucking Employment Index climbed from 100.5 in June to 101 in July and is up from 98 in February. That indicates non-seasonally adjusted trucking employment is up 1% from its average in the fourth quarter of 2018. A steady increase in non-seasonally adjusted trucking employment shows there’s more life in trucking than one might expect following lackluster carrier earnings reports. The number of real, unadjusted trucking jobs has risen every month since February, climbing higher by 45,500 employees over that six-month period, according to non-seasonally adjusted BLS data released Friday. On an annualized basis, for-hire trucking employment was up 0.4% at approximately 1.54 million jobs in July from the same month a year ago, before adjustment. The non-seasonally adjusted BLS numbers have been positive year over year since May. Even seasonally adjusted trucking job numbers rose in July, rising by 3,600, indicating stronger-than-expected growth in what’s usually a quieter month for trucking. Recovering from revision The latest data shows a continuing recovery in employment numbers after a revision by BLS found trucking employment had been over-reported in the period from 2022 through 2024, with the number of trucking employees inflated by as much as 2% to 4%. That revision pulled trucking employment numbers down to their lowest point since May 2021 at about 1.49 million employees, lower than in the pre-pandemic year of 2019. The latest revision to the BLS employment data showed hiring was slower in May and June than previously reported, and gains in July were weaker than expected. But the revision did not affect the trucking employment data. The data for the first seven months of 2025 shows a normal seasonal progression and tracks very closely with data for the same period in 2024. On a sequential monthly basis, trucking employment increased 0.6% on average since February. For-hire trucking employment is still 2.5% below its peak in August 2022, when trucking companies employed more than 1.6 million workers. Large, publicly owned truckload carriers have been more focused on cutting costs and improving vehicle utilization than adding employees to their payrolls, but they did increase their truck counts slightly in the last quarter. Schneider National, one of the largest US truckload providers, saw a net increase of 200 drivers in the second quarter, according to CEO Mark B. Rourke. Driver recruiting saw “pockets of strength” in the second quarter, Rourke told Wall Street analysts last week, as drivers working for small companies sought jobs with larger, more financially stable fleets. Nearly 9,900 motor carriers left the market between December 2024 and July, according to the Federal Motor Carrier Safety Administration (FMCSA). The number of newly registered carriers peaked in 2024 at 55,853 companies, according to FMCSA data. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Surface

Trucking News

Trucking labor

US trucking employment rising steadily despite soft freight market

<div class="phx-topic abstract-wrapper">Robert Loya takes the helm of HTA as the drayage industry struggles with stagnant pricing power, increased operating costs and strong competition from new entrants, including AI-enabled platforms. </div>

Robert Loya takes the helm of HTA as the drayage industry struggles with stagnant pricing power, increased operating costs and strong competition from new entrants, including AI-enabled platforms.

<div class="phx-topic">The COO of drayage and logistics provider TGS Logistics has been appointed the next CEO of the Harbor Trucking Association (HTA), which represents drayage operators in Los Angeles-Long Beach and Oakland, the group announced Tuesday. Robert Loya, who has more than 30 years of experience in trucking and maritime logistics, will work alongside current HTA chief Matt Schrap until Aug. 22, at which time Schrap will leave the group for employment elsewhere. HTA <a href="https://www.joc.com/article/hta-seeks-new-ceo-amid-multiple-challenges-for-west-coast-drayage-operators-6009322">announced in May</a> that Schrap, its CEO since 2021, would be leaving the organization in August. Loya takes the helm of HTA as the drayage industry nationwide struggles with <a href="https://www.joc.com/article/drayage-stakeholders-say-industry-under-threat-from-falling-rates-increased-costs-6045985">stagnant pricing power, increased operating costs and strong competition</a> from new entrants, including AI-enabled platforms. Over the past month, two California drayage operators have ceased operations, citing both the national issues and efforts to comply with state regulations to phase in newer clean-diesel trucks. Also, <a href="https://www.joc.com/article/second-california-drayage-operator-shuts-business-cites-electric-truck-costs-6056822">beginning in 2035</a>, truck manufacturers will only be allowed to sell new zero-emission trucks in California. Loya has served as board president of the California Trucking Association and on the board of directors of the American Trucking Associations’ Intermodal Carriers Conference. He also served on the Intermodal Interchange Executive Committee for the Intermodal Association of North America. Loya served on the Federal Maritime Commission’s supply chain innovation teams in 2016, 2019 and 2020, contributing to notices of proposed rulemaking and industry advocacy efforts to advance the drayage sector. He remains involved with various working groups at the ports of Los Angeles and Long Beach. HTA said in a statement its executive committee “is confident in (Loya’s) leadership and excited for the vision and direction he will bring to the Harbor Trucking Association as we move forward.” Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

The COO of drayage and logistics provider TGS Logistics has been appointed the next CEO of the Harbor Trucking Association (HTA), which represents drayage operators in Los Angeles-Long Beach and Oakland, the group announced Tuesday. Robert Loya, who has more than 30 years of experience in trucking and maritime logistics, will work alongside current HTA chief Matt Schrap until Aug. 22, at which time Schrap will leave the group for employment elsewhere. HTA announced in May that Schrap, its CEO since 2021, would be leaving the organization in August. Loya takes the helm of HTA as the drayage industry nationwide struggles with stagnant pricing power, increased operating costs and strong competition from new entrants, including AI-enabled platforms. Over the past month, two California drayage operators have ceased operations, citing both the national issues and efforts to comply with state regulations to phase in newer clean-diesel trucks. Also, beginning in 2035 , truck manufacturers will only be allowed to sell new zero-emission trucks in California. Loya has served as board president of the California Trucking Association and on the board of directors of the American Trucking Associations’ Intermodal Carriers Conference. He also served on the Intermodal Interchange Executive Committee for the Intermodal Association of North America. Loya served on the Federal Maritime Commission’s supply chain innovation teams in 2016, 2019 and 2020, contributing to notices of proposed rulemaking and industry advocacy efforts to advance the drayage sector. He remains involved with various working groups at the ports of Los Angeles and Long Beach. HTA said in a statement its executive committee “is confident in (Loya’s) leadership and excited for the vision and direction he will bring to the Harbor Trucking Association as we move forward.” Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Port News

Drayage

Industry veteran tapped as new CEO of Harbor Trucking Association

<div class="phx-topic abstract-wrapper">The German integrator was able to offset tariff-driven volatility in the second quarter through cost-cutting measures but is facing “more of the same” in Q3, according to its CFO. </div>

The German integrator was able to offset tariff-driven volatility in the second quarter through cost-cutting measures but is facing “more of the same” in Q3, according to its CFO.

<div class="phx-topic">DHL Group on Tuesday reported a 12% increase in operating profit for the first half of 2025 despite negative currency effects and significantly lower volumes in its international express and ocean freight forwarding units during a volatile second quarter. The Bonn-based global integrator posted earnings before interest and taxes (EBIT) of just over $1 billion (€929 million) in the first six months, with aggressive cost-cutting measures offsetting a 0.6% year-over-year drop in revenue to $47 billion. The first-half net profit increased 7.9% to $1.8 billion. “We saw the injection of volatility in the world in our Q2 numbers,” DHL CFO Melanie Kreis told analysts during an earnings call, warning that ongoing tariff uncertainty meant investors could expect “more of the same” in the third quarter. ”We are at the beginning of the third quarter, and we haven’t seen a significant acceleration in the growth dynamics, and it remains very volatile,” she said. That volatility was front and center in Express, the DHL Group’s largest division, where the removal of duty-free status on low-value imports from China and Hong Kong by the United States on May 2 cut the volume by 20% in the second quarter. That led to an overall decline of 10% in business-to-consumer (B2C) parcel shipments. The drop in express volume cut total second-quarter express revenue by 5.7% to $6.7 billion, with the Asia-Pacific segment declining 11.3% year over year. But aggressive cost-cutting, including the return of leased aircraft and reallocating aircraft capacity to other trade lanes, limited the impact, with Q2 EBIT increasing 6.9% to $840 million. “In early July, it was said the (US) de minimis rule would stay in place until the summer of 2027, then just four weeks later, we get an executive order (from the White House) which foresees the complete abolishment of de minimis for the rest of world by Aug. 29,” Kreis said. “There are still many moving parts, and we now need to watch and see what the details are, what it means for trade and where the opportunities could be,” she added. “I pushed my team to tell me the worst-case scenario, and they came up with a €200 million (US$232 million) figure for 2025 from loss of volume.” <h3>Negative currency effects </h3>The second-largest DHL segment, Global Forwarding Freight, reported second-quarter revenue was down 5.3% year over year due to a 5.9% drop in ocean volume of 796,000 TEUs and negative currency effects totaling $130 million. Revenue in the ocean segment dropped 6.8% to $1.5 billion. Air freight increased 1.2% in the second quarter to 442,000 tons with revenue falling 3.7% to $1.7 billion, primarily because of negative currency effects, DHL noted. The difficult operating environment dragged the forwarding division’s EBIT down almost 30% year over year in the second quarter to $226 million. Q2 revenue in the Supply Chain division declined 3.9% to $4.8 billion. Excluding negative currency effects of $191 million, revenue for the second quarter was on the previous year’s level. EBIT rose 24.4% to $400 million. Revenue in DHL’s e-Commerce division declined 0.7% to $1.9 billion, with EBIT down 16.1% at $65 million. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

DHL Group on Tuesday reported a 12% increase in operating profit for the first half of 2025 despite negative currency effects and significantly lower volumes in its international express and ocean freight forwarding units during a volatile second quarter. The Bonn-based global integrator posted earnings before interest and taxes (EBIT) of just over $1 billion (€929 million) in the first six months, with aggressive cost-cutting measures offsetting a 0.6% year-over-year drop in revenue to $47 billion. The first-half net profit increased 7.9% to $1.8 billion. “We saw the injection of volatility in the world in our Q2 numbers,” DHL CFO Melanie Kreis told analysts during an earnings call, warning that ongoing tariff uncertainty meant investors could expect “more of the same” in the third quarter. ”We are at the beginning of the third quarter, and we haven’t seen a significant acceleration in the growth dynamics, and it remains very volatile,” she said. That volatility was front and center in Express, the DHL Group’s largest division, where the removal of duty-free status on low-value imports from China and Hong Kong by the United States on May 2 cut the volume by 20% in the second quarter. That led to an overall decline of 10% in business-to-consumer (B2C) parcel shipments. The drop in express volume cut total second-quarter express revenue by 5.7% to $6.7 billion, with the Asia-Pacific segment declining 11.3% year over year. But aggressive cost-cutting, including the return of leased aircraft and reallocating aircraft capacity to other trade lanes, limited the impact, with Q2 EBIT increasing 6.9% to $840 million. “In early July, it was said the (US) de minimis rule would stay in place until the summer of 2027, then just four weeks later, we get an executive order (from the White House) which foresees the complete abolishment of de minimis for the rest of world by Aug. 29,” Kreis said. “There are still many moving parts, and we now need to watch and see what the details are, what it means for trade and where the opportunities could be,” she added. “I pushed my team to tell me the worst-case scenario, and they came up with a €200 million (US$232 million) figure for 2025 from loss of volume.” Negative currency effects The second-largest DHL segment, Global Forwarding Freight, reported second-quarter revenue was down 5.3% year over year due to a 5.9% drop in ocean volume of 796,000 TEUs and negative currency effects totaling $130 million. Revenue in the ocean segment dropped 6.8% to $1.5 billion. Air freight increased 1.2% in the second quarter to 442,000 tons with revenue falling 3.7% to $1.7 billion, primarily because of negative currency effects, DHL noted. The difficult operating environment dragged the forwarding division’s EBIT down almost 30% year over year in the second quarter to $226 million. Q2 revenue in the Supply Chain division declined 3.9% to $4.8 billion. Excluding negative currency effects of $191 million, revenue for the second quarter was on the previous year’s level. EBIT rose 24.4% to $400 million. Revenue in DHL’s e-Commerce division declined 0.7% to $1.9 billion, with EBIT down 16.1% at $65 million. Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo Carriers News

Air Cargo

DHL posts solid half-year profit despite Q2 drag on express, ocean volumes

<div class="phx-topic abstract-wrapper">While some planned larger projects are facing delays due to challenging market conditions, new facilities will benefit from renewed fiscal support from Washington. </div>

While some planned larger projects are facing delays due to challenging market conditions, new facilities will benefit from renewed fiscal support from Washington.

<div class="phx-topic">The passage of the One Big Beautiful Bill Act by the US Congress in July could energize the already active build-out of US semiconductor chip manufacturing plants, potentially driving up the demand for breakbulk and project cargo logistics and shipments. But for that to happen, the semiconductor space will need to overcome setbacks that have resulted in delays on some key construction projects for these multibillion-dollar facilities. The new legislation, which President Donald Trump signed into law on July 4, expands the tax credit to 35% from the current 25%, which became available under the US CHIPS and Science Act. Passed in 2022, the US CHIPS Act incentivizes the domestic research, development and manufacturing of semiconductors — microchips that function as the brains of most modern technology applications, including smartphones, automobiles, medical devices and datacenters. When lawmakers approved the CHIPS Act, they designated $39 billion — about three-quarters of the $52.7 billion in CHIPS funding — for the construction of semiconductor fabrication facilities, or “fabs.” John Lu, global sector head of semiconductor fabrications for the industrial projects unit of DHL Global Forwarding, told the Journal of Commerce that the increased credit sends a clear signal to the semiconductor industry that it has the current administration’s backing to bring manufacturing back to the US while supporting investments that manufacturers have poured into constructing new facilities. “It simply reinforces the demand for project cargo logistics, and potentially breakbulk services required to support the growing construction needs,” Lu said. <h3>Setbacks hinder scale-up </h3>But whether the incentive translates to more construction of fabrication facilities remains to be seen. Lu pointed out that multiple US fab construction projects have encountered delays for various reasons. Among the disruptions, companies have cited challenging market conditions, fluctuating customer demands, skilled labor shortages and the slow disbursement of government funding. “It’s not confirmed that more facilities may be planned, as there requires a tremendous technological driving force to spike up the demand for more fabs,” Lu said, adding that artificial intelligence and internet of things technologies are the primary drivers of semiconductor manufacturing facility development. In February, Intel for a second time pushed back the completion date of its $20 billion Ohio One project, a pair of semiconductor production facilities that have been under construction in central Ohio since 2022. Intel now estimates it will be at least 2030 before the first facility is complete. Initial estimates were for production to begin in 2025, but that projection was later adjusted to 2027. Another project facing scrutiny is Samsung’s $44 billion chip fab under construction in central Texas. News reports have surfaced in recent months that a lack of customers could force Samsung to push back the facility’s 2026 completion date, although Samsung denied those claims in a statement to the Houston Chronicle in July. Meanwhile, the world’s largest chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC), is doubling down on its US investments and accelerating construction timelines following previous project delays. In March, the company announced plans to increase its US investments by $100 billion to $165 billion. And after twice pushing back construction plans for its chip plant complex in Arizona, TSMC CEO C.C. Wei said during the company’s July 17 earnings call that the company would bump up its production timelines “by several quarters” to meet strong demand from US customers. <h3>Super loads and ‘staggering’ volumes </h3>Engineering, procurement and construction giant Bechtel is known for taking on projects that are first of a kind or massive in scale, including the Hoover Dam and the Channel Tunnel, or Chunnel, linking Great Britain and mainland Europe. Semiconductor projects have recently grown in scale to that level of projects, Kristin Homsi, Bechtel Manufacturing &amp; Technology’s supply chain manager, told the Journal of Commerce. “The construction commodity volume is staggering,” Homsi said, adding that these facilities call for novel technologies that need to be designed and engineered into existence.” Bechtel is building advanced semiconductor facilities in the Midwest for an undisclosed client, Homsi said. These kinds of projects can require as much steel as eight Eiffel Towers, and as much concrete as a new nuclear power plant. “We’re looking at piping and cabling in the millions of linear feet,” she said. “These quantities make logistics incredibly complex.” Lu pointed out that getting the manufacturing and production equipment in on time is of critical importance to the financial viability of the projects, and that logistical precision is critical to ensure facilities can start producing as soon as possible. “Every day that you’re not manufacturing, a $20 billion fab could be losing as much as $5 million a day,” he said. The demand for constructing semiconductor fabrication facilities makes for an especially heavy-lift cargo for breakbulk and project logistics providers and carriers. Constructing semiconductor fabrication plants often requires the transport and handling of extremely large, highly sensitive equipment and other components. “We’re talking about thousands and thousands of these types of materials that need to go into these fabs,” Lu said. Transporting the components and equipment involves moving massive equipment such as air processor units, tanks, water treatment components and other heavy machinery. “That requires a more specialized type of service that can handle these more technical, high-value goods,” Lu said. In the spring and summer of 2024, Intel’s $28 billion silicon chip plant under construction in central Ohio required 24 “super load” cargo movements over land. One of the loads, transported by Shelbyville, Ky.-based Edwards Moving &amp; Rigging, weighed nearly 1 million pounds. Lu said that on fabs DHL has worked on, the company has had to extensively map out the transport of supersize loads. “A lot of planning has to be done months and months in advance, just for one piece,” he said. “And it’s coming from all different locations in the US and overseas.” Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com</a>. </div>

The passage of the One Big Beautiful Bill Act by the US Congress in July could energize the already active build-out of US semiconductor chip manufacturing plants, potentially driving up the demand for breakbulk and project cargo logistics and shipments. But for that to happen, the semiconductor space will need to overcome setbacks that have resulted in delays on some key construction projects for these multibillion-dollar facilities. The new legislation, which President Donald Trump signed into law on July 4, expands the tax credit to 35% from the current 25%, which became available under the US CHIPS and Science Act. Passed in 2022, the US CHIPS Act incentivizes the domestic research, development and manufacturing of semiconductors — microchips that function as the brains of most modern technology applications, including smartphones, automobiles, medical devices and datacenters. When lawmakers approved the CHIPS Act, they designated $39 billion — about three-quarters of the $52.7 billion in CHIPS funding — for the construction of semiconductor fabrication facilities, or “fabs.” John Lu, global sector head of semiconductor fabrications for the industrial projects unit of DHL Global Forwarding, told the Journal of Commerce that the increased credit sends a clear signal to the semiconductor industry that it has the current administration’s backing to bring manufacturing back to the US while supporting investments that manufacturers have poured into constructing new facilities. “It simply reinforces the demand for project cargo logistics, and potentially breakbulk services required to support the growing construction needs,” Lu said. Setbacks hinder scale-up But whether the incentive translates to more construction of fabrication facilities remains to be seen. Lu pointed out that multiple US fab construction projects have encountered delays for various reasons. Among the disruptions, companies have cited challenging market conditions, fluctuating customer demands, skilled labor shortages and the slow disbursement of government funding. “It’s not confirmed that more facilities may be planned, as there requires a tremendous technological driving force to spike up the demand for more fabs,” Lu said, adding that artificial intelligence and internet of things technologies are the primary drivers of semiconductor manufacturing facility development. In February, Intel for a second time pushed back the completion date of its $20 billion Ohio One project, a pair of semiconductor production facilities that have been under construction in central Ohio since 2022. Intel now estimates it will be at least 2030 before the first facility is complete. Initial estimates were for production to begin in 2025, but that projection was later adjusted to 2027. Another project facing scrutiny is Samsung’s $44 billion chip fab under construction in central Texas. News reports have surfaced in recent months that a lack of customers could force Samsung to push back the facility’s 2026 completion date, although Samsung denied those claims in a statement to the Houston Chronicle in July. Meanwhile, the world’s largest chipmaker, Taiwan Semiconductor Manufacturing Co. (TSMC), is doubling down on its US investments and accelerating construction timelines following previous project delays. In March, the company announced plans to increase its US investments by $100 billion to $165 billion. And after twice pushing back construction plans for its chip plant complex in Arizona, TSMC CEO C.C. Wei said during the company’s July 17 earnings call that the company would bump up its production timelines “by several quarters” to meet strong demand from US customers. Super loads and ‘staggering’ volumes Engineering, procurement and construction giant Bechtel is known for taking on projects that are first of a kind or massive in scale, including the Hoover Dam and the Channel Tunnel, or Chunnel, linking Great Britain and mainland Europe. Semiconductor projects have recently grown in scale to that level of projects, Kristin Homsi, Bechtel Manufacturing & Technology’s supply chain manager, told the Journal of Commerce. “The construction commodity volume is staggering,” Homsi said, adding that these facilities call for novel technologies that need to be designed and engineered into existence.” Bechtel is building advanced semiconductor facilities in the Midwest for an undisclosed client, Homsi said. These kinds of projects can require as much steel as eight Eiffel Towers, and as much concrete as a new nuclear power plant. “We’re looking at piping and cabling in the millions of linear feet,” she said. “These quantities make logistics incredibly complex.” Lu pointed out that getting the manufacturing and production equipment in on time is of critical importance to the financial viability of the projects, and that logistical precision is critical to ensure facilities can start producing as soon as possible. “Every day that you’re not manufacturing, a $20 billion fab could be losing as much as $5 million a day,” he said. The demand for constructing semiconductor fabrication facilities makes for an especially heavy-lift cargo for breakbulk and project logistics providers and carriers. Constructing semiconductor fabrication plants often requires the transport and handling of extremely large, highly sensitive equipment and other components. “We’re talking about thousands and thousands of these types of materials that need to go into these fabs,” Lu said. Transporting the components and equipment involves moving massive equipment such as air processor units, tanks, water treatment components and other heavy machinery. “That requires a more specialized type of service that can handle these more technical, high-value goods,” Lu said. In the spring and summer of 2024, Intel’s $28 billion silicon chip plant under construction in central Ohio required 24 “super load” cargo movements over land. One of the loads, transported by Shelbyville, Ky.-based Edwards Moving & Rigging, weighed nearly 1 million pounds. Lu said that on fabs DHL has worked on, the company has had to extensively map out the transport of supersize loads. “A lot of planning has to be done months and months in advance, just for one piece,” he said. “And it’s coming from all different locations in the US and overseas.” Contact Autumn Cafiero Giusti at autumn@autumngiusti.com .

Supply chain

Project cargo

Breakbulk News

Extended tax credits for chip manufacturers to boost heavy-lift cargo demand

<div class="phx-topic abstract-wrapper">TGS Logistics said state grants for electric trucks failed to stem higher costs for new equipment amid a soft rate environment. </div>

TGS Logistics said state grants for electric trucks failed to stem higher costs for new equipment amid a soft rate environment.

<div class="phx-topic">A second major California-based drayage operator has closed its doors in less than a month, raising renewed concerns that the cost of the state’s green push for low and zero-emission trucks might be hastening the demise of the companies. TGS Logistics last week shut down its operations in Northern and Southern California, <a href="https://www.joc.com/article/drayage-stakeholders-say-industry-under-threat-from-falling-rates-increased-costs-6045985">following GSC Enterprises’ announcement</a> in mid-July that it ceased operations in the Oakland area. Robert Loya, chief operating officer at TGS, said that drayage operators in California rely upon “layered grants” from the state and from the ports of Los Angeles and Long Beach. A harbor-wide clean truck program reimburses drayage providers partly for electric truck purchases, but much of the revenues collected through the $10-per-TEU fee on laden containers goes toward building electric charging infrastructure. <a href="https://www.joc.com/article/drayage-stakeholders-say-industry-under-threat-from-falling-rates-increased-costs-6045985">Drayage operators are struggling</a> in an environment marked by stagnating pricing while drayage operators’ costs have increased significantly. These market developments haven’t spared drayage operators in California who also face the additional cost of approximately $500,000 per zero-emission truck, said Matt Schrap, CEO of the Harbor Trucking Association. Drayage operators in California have been upgrading their fleets <a href="https://www.joc.com/article/proposed-california-container-fee-would-hit-bcos-5198183">with clean-diesel trucks</a> and, more recently, <a href="https://www.joc.com/article/new-fee-to-support-zero-emission-drayage-fleet-at-la-lb-5228423">with the purchase of zero-emission trucks</a>. Those purchases have “exacerbated” current market conditions, he said. The ports since 2022 together have collected about $250 million in revenue from the Clean Truck Fund (CTF) rate. The grants to individual drayage companies are made when the zero-emission vehicles are delivered. The ports continue to modify the CTF rate so that it will have a greater impact on the financial capability of drayage operators to purchase zero-emission vehicles, said Noel Hacegaba, chief operating officer of the Port of Long Beach. Bryan Brandes maritime director at the Port of Oakland, said drayage operators in California — who are already struggling with waning pricing power and increased operating costs and at the same time are purchasing clean-diesel and zero-emission vehicles — run the risk of following TGS’ fate. “TGS was trying to be a leader in the clean-truck movement,” Brandes said. Contact Bill Mongelluzzo at <a href="mailto:bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

A second major California-based drayage operator has closed its doors in less than a month, raising renewed concerns that the cost of the state’s green push for low and zero-emission trucks might be hastening the demise of the companies. TGS Logistics last week shut down its operations in Northern and Southern California, following GSC Enterprises’ announcement in mid-July that it ceased operations in the Oakland area. Robert Loya, chief operating officer at TGS, said that drayage operators in California rely upon “layered grants” from the state and from the ports of Los Angeles and Long Beach. A harbor-wide clean truck program reimburses drayage providers partly for electric truck purchases, but much of the revenues collected through the $10-per-TEU fee on laden containers goes toward building electric charging infrastructure. Drayage operators are struggling in an environment marked by stagnating pricing while drayage operators’ costs have increased significantly. These market developments haven’t spared drayage operators in California who also face the additional cost of approximately $500,000 per zero-emission truck, said Matt Schrap, CEO of the Harbor Trucking Association. Drayage operators in California have been upgrading their fleets with clean-diesel trucks and, more recently, with the purchase of zero-emission trucks . Those purchases have “exacerbated” current market conditions, he said. The ports since 2022 together have collected about $250 million in revenue from the Clean Truck Fund (CTF) rate. The grants to individual drayage companies are made when the zero-emission vehicles are delivered. The ports continue to modify the CTF rate so that it will have a greater impact on the financial capability of drayage operators to purchase zero-emission vehicles, said Noel Hacegaba, chief operating officer of the Port of Long Beach. Bryan Brandes maritime director at the Port of Oakland, said drayage operators in California — who are already struggling with waning pricing power and increased operating costs and at the same time are purchasing clean-diesel and zero-emission vehicles — run the risk of following TGS’ fate. “TGS was trying to be a leader in the clean-truck movement,” Brandes said. Contact Bill Mongelluzzo at bill.mongelluzzo@spglobal.com .

Second California drayage operator shuts business, cites electric truck costs

Use code TPM25GW995 at checkout to save $500 on first year of a Gold subscription and 20% on a TPM26 registration!

Subscribe Now - FT/Anonymous to Gold - Wide Box

SAVE ON A GOLD SUBSCRIPTION AND TPM26

Use code GTW695 at checkout and save $800 on first year of an annual Gold subscription!

Upgrade Subscription - Gold Trials

Become a Gold Subscriber and Save!

Use code TPMGW595 at checkout to save $900 on first year of a Gold subscription and 20% on a TPM26 registration!

Upgrade Subscription - S/SP to Gold - Wide Box

UPGRADE TO GOLD FOR JUST $595

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

Group Subscriptions - Wide Box

Get into a group subscription today

Access Journal of Commerce content for 30 days

Free Trial - Wide Box

START A FREE TRIAL TODAY

Use code STS20 at checkout to save 20% on a Silver or Silver Plus annual subscription! 

Subscribe Now - FT/Anonymous to S/SP - Wide Box

SUBSCRIBE AND SAVE

At SSA Marine Mexico, we firmly believe that business development must go hand in hand with social and environmental well-being. Our vision is not solely focused on operating efficiently, but also on creating a meaningful and positive impact in the communities where we are present. Since 1995, we have reaffirmed this commitment through tangible actions that reflect our core values of responsibility, solidarity, and sustainability. <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-3_2 joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left" data-figure-aspect-ratio="3:2"><img src="/content-assets/1752584535914_Photo%201.jpg" alt="" class="joc_admin__inline-image-inherit"> A Year of Major Achievements Over the past year, we allocated more than $107,000 USD to the implementation of 60 social and environmental projects, positively impacting over 7,800 people across various regions of Mexico. Each initiative was designed with a holistic approach, addressing key areas that contribute to long-term community development. Education: Laying the Foundation for the Future Education is one of the most powerful tools to promote social mobility and equitable development. At SSA Marine Mexico, we support academic initiatives that inspire and empower the next generation of leaders. One of our most impactful partnerships was with the University of Colima, where we sponsored the “Reto Camp” program. This initiative encourages university students to develop innovative solutions in the fields of sustainability, logistics, and port operations, offering them mentorship, tools, and real-world challenges to solve. In addition, we donated microscopes, school supplies, and educational materials to institutions in underserved communities, helping to improve the learning environment and provide students with the resources they need to succeed. Health and Sports: Promoting Wellness We believe that healthy communities are strong communities. We have supported several local sporting events and provided direct assistance to talented athletes, enabling them to pursue their passions and represent their regions with pride. Beyond sports, we also strengthened our collaboration with critical emergency response organizations such as the Mexican Red Cross and Civil Protection. Our contributions helped enhance their readiness and capabilities in times of crisis, ensuring better outcomes for those affected by emergencies. Supporting Vulnerable Groups: Reaching Those Who Need It Most A core part of our social responsibility efforts is directed toward supporting vulnerable populations. We have contributed to a range of initiatives focused on children, migrants, and at-risk families. These efforts included donations to orphanages and shelters, as well as support for the National Institute of Migration and grassroots organizations dedicated to protecting and empowering people facing adversity. By standing with those in need, we reinforce our commitment to inclusion and social justice, values that are central to our identity as a responsible company. <span class="joc_admin__inline-image joc_admin__inline-image-aspect-ratio-3_2 joc_admin__inline-image-position-left joc_admin__inline-image-size-medium" data-figure-size="medium" data-figure-position="left" data-figure-aspect-ratio="3:2"><img src="/content-assets/1752584944645_Photo%202.png" alt="" class="joc_admin__inline-image-inherit">Culture: Strengthening Community Identity Cultural identity is a key element in building resilient and united communities. At SSA Marine Mexico, we actively participate in the organization and sponsorship of cultural events that celebrate local traditions and foster civic pride. Working alongside port authorities and municipal governments, we helped bring music, art, and heritage to the forefront, creating spaces for community engagement and intercultural dialogue. Environment: Investing in the Planet Our commitment to sustainability goes beyond operations—it’s a philosophy that drives every decision we make. We have partnered with environmental institutions to carry out reforestation campaigns, beach cleanups, and conservation efforts. In collaboration with the Institute for the Environment, we supported initiatives aimed at decarbonization, biodiversity protection, and environmental education. By involving our employees and local volunteers in these actions, we also foster a culture of environmental stewardship throughout our organization and our surrounding communities. Innovation for a Sustainable Future Sustainability is not just about doing good—it’s also about doing things better. In 2024, we invested $22 million USD in the acquisition of 11 state-of-the-art E-RTG cranes. These electric rubber-tired gantry cranes represent a significant technological advancement in port equipment. Seven of them are already operating on clean electric energy, resulting in a reduction of nearly 4,000 tons of CO₂ emissions and improving operational efficiency by 7%. The remaining four cranes are fully compatible with future electrification, underscoring our long-term strategy to modernize our operations in an environmentally responsible way. This investment is part of a broader innovation roadmap that includes digitalization, automation, and cleaner energy sources—all designed to ensure that our ports continue to grow without compromising the health of our planet. Building a Better Tomorrow, Together At SSA Marine Mexico, we understand that sustainability is a shared and ongoing responsibility. True impact requires collaboration across sectors, long-term vision, and unwavering commitment. That is why we continue to work hand-in-hand with local authorities, non-profit organizations, universities, and our own employees to create solutions that are both scalable and sustainable. Our journey is far from over. In the years ahead, we will continue to deepen our community engagement, explore cleaner technologies, and strengthen the social fabric of the regions where we operate. Each initiative, no matter the size, is a step toward building a future where business success goes hand-in-hand with human and environmental prosperity. We are proud of what we have achieved in 2024, but we are even more excited about what lies ahead. SSA Marine Mexico — Moving the World, Caring for People and Planet. LINK: https://www.ssamarine.mx/

Photo 2.png

SSA Marine Mexico: True Commitment to Sustainability

SAVE ON A GOLD SUBSCRIPTION: Use code TPM25GW995 to save $500 on an annual Gold subscription and 20% on a TPM26 registration!

Subscribe Now - FT/Anonymous to Gold - Offer Box

UPGRADE TO GOLD AND SAVE: Use code GTW695 at checkout and save $800 on first year of a Gold subscription!

Upgrade Subscription

SUBSCRIBE AND SAVE: Use code STSW20 to save 20% on first year of a Silver or Silver Plus annual subscription!


Subscribe Now - FT/Anonymous to S/SP - Offer Box

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

Group Subscriptions - Offer Box

Group Subscriptions

UPGRADE TO GOLD AND SAVE: Use code TPMGW595 at checkout to save $900 on first year of a Gold subscription and 20% on TPM26! 

Upgrade Subscription - S/SP to Gold - Offer Box

START A FREE TRIAL: Access Journal of Commerce content for 30 days

Free Trial - Offer Box

Free Trial

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

Journal of Commerce Magazine - Rectangle Box

Journal of Commerce Magazine

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

Breakbulk Report - Rectangle Box

Breakbulk Quarterly

Customers scoring their intermodal partners to identify the best service providers

Intermodal Service Scorecard - Rectangle Box

Intermodal Service Scorecard

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

Inland Conference - Rectangle Box

Attend Inland25

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

ISI Report - Rectangle Box

Intermodal Savings Index

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

Gateway - Rectangle Box

Gateway

A premium access outlook critical to shippers and transportation providers

QI Report - Rectangle Box

Quarterly Intelligence

The latest container shipping news and analysis of ocean container shipping, logistics, supply chains, technology solutions and end-to-end connectivity. Coverage includes the movement of containerized cargo handled by marine terminals and container ports, depots, container lines, drayage, consignees, importers and shippers, forwarders, non-vessel operating common carriers (NVOs) and off-dock warehousing providers. The Journal of Commerce's container shipping news includes news from the trans-Pacific, Asia–Europe, North America–Caribbean, Central and South America trades, and intra-Asia trades.

Trans-Atlantic

Forwarding

Asia-Europe

Trans-Pacific

Container shipping news and analysis of ocean container shipping, logistics, supply chains, technology and end-to-end connectivity.

Container Shipping News | Journal of Commerce

Container Shipping News

The Journal of Commerce is the industry’s source for maritime news and analysis about ocean container shipping, logistics, supply chains, global shipping ports, shipping technology solutions and end-to-end connectivity. Coverage tracks the movement of containerized cargo — from origin to destination — handled by marine terminals in the US and abroad, depots, container ports, container lines, drayage, consignees and shippers, forwarders, non-vessel operating common carriers (NVOs) and off-dock warehousing providers, as well as pricing, capacity, volume and reliability on the trans-Pacific, Asia–Europe, North America–Caribbean, Central and South American and intra-Asia trades.

Discover comprehensive trucking news and trends with Journal of Commerce - from trucking LTL to regulation and trucking supply and demand.

Breakbulk News shipping | Journal of Commerce

Stay informed on port news worldwide with Journal of Commerce. From decarbonization to labor updates, get insights on global developments.

Port News | Journal of Commerce

News and analysis of ocean containerized cargo movement, logistics, supply chains, technology, and end-to-end connectivity. Maritime news and analysis of containerized ocean cargo movement, breakbulk and roll-on and roll-off shipping from origin to destination.

Latest News

More News & Analysis

US trucking employment rising steadily despite soft freight market

Industry veteran tapped as new CEO of Harbor Trucking Association

DHL posts solid half-year profit despite Q2 drag on express, ocean volumes