<div class="phx-topic abstract-wrapper">Peninsular and Oriental Steam Navigation Co. reported strong overall financial results for 1997, wit</div>

Peninsular and Oriental Steam Navigation Co. reported strong overall financial results for 1997, wit

<div>Peninsular and Oriental Steam Navigation Co. reported strong overall financial results for 1997, with its combined container shipping operation with Nedlloyd Lines the only weak spot on the balance sheet.P&amp;O Group's 1997 profits - before factoring in the costs of forming the P&amp;O-Nedlloyd container shipping joint venture in late 1996 - were 401.2 million ($666 million), a 25 percent increase from 1996 profits.With the cost of the P&amp;O-Nedlloyd reorganization factored in, the group's year-to-year profit increase dropped to 17 percent. However, the sale of other assets, such as British home-builder Bovis Homes, bumped up the year-to-year profit to 30 percent....

Peninsular and Oriental Steam Navigation Co. reported strong overall financial results for 1997, with its combined container shipping operation with Nedlloyd Lines the only weak spot on the balance sheet. P&O Group's 1997 profits - before factoring in the costs of forming the P&O-Nedlloyd container shipping joint venture in late 1996 - were 401.2 million ($666 million), a 25 percent increase from 1996 profits.With the cost of the P&O-Nedlloyd reorganization factored in, the group's year-to-year profit increase dropped to 17 percent. However, the sale of other assets, such as British home-builder Bovis Homes, bumped up the year-to-year profit to 30 percent. ''It has been a pretty productive year,'' the company's chairman, Lord Jeffrey Sterling, told a news conference on Tuesday. He added that strong profits in the company's two largest divisions, cruises and property, were the biggest contributors to the overall results. P&O Ferries was helped by the misfortune of a key competitor - a fire in the Channel Tunnel in November 1996, which shut down the tunnel and caused freight and passenger business to switch to ferries for several months. This past Jan. 1, P&O Ferries raised its cross-channel freight rates by 12 percent, the first time that those rates were increased after a long period of decline. P&O-Nedlloyd, like other container shipping lines, suffered from rate declines during 1997. However, the company cut $200 million in costs during 1997 and plans further cost reductions for 1998, said P&O-Nedlloyd Chief Executive Tim Harris. Despite the cost savings, the company's return on assets during 1997 was only 2 percent - down from P&O Containers' pre-merger profit of around 3.5 percent in 1996. ''It goes without saying that 2 percent is inadequate,'' Lord Sterling said. ''But we are on the right road. We have combined the two companies, cut costs, increased throughput and strengthened our markets.'' The main problem for the container venture is that ocean shipping rates ''have been fragile, to say the least,'' with most container shipping lines showing worse results, Lord Sterling said. However, he added, the number of scrappings of older vessels in the industry has increased in recent months, while P&O has commissioned new vessels, and ''what's key is who has the newer ships.'' Asia's economic difficulties did not affect P&O-Nedlloyd during 1997, but the 1998 outlook is less certain, said Mr. Harris. Imports into Asia have declined by about 10 percent so far this year, while exports out of Asia have increased by 10 percent, widening an existing imbalance in the east-west trade. ''That's an imbalance challenge that we have to get on top of,'' he said. In another area of group operations, P&O Bulk Shipping formed a joint venture with Shougang Corp., a large Chinese steel producer. The merger will produce the world's biggest independent fleet of capesize dry bulk carriers.

Maritime

P&O POSTS STRONG PROFIT FOR 1997

<div class="phx-topic abstract-wrapper">Amid new threats from Houthi militants and the arrival of a US carrier strike group in the region, carriers — and their customers — are once again wondering when they will be able to safely transit the Red Sea/Suez route.</div>

Amid new threats from Houthi militants and the arrival of a US carrier strike group in the region, carriers — and their customers — are once again wondering when they will be able to safely transit the Red Sea/Suez route.

Feature image

<div class="phx-topic">Shippers on the trades linking Asia to Europe and the US East Coast hoping for a resumption of Red Sea and Suez Canal transits remain at the mercy of factors out of their control as the regional security situation deteriorates anew. A US carrier strike group has arrived in the Gulf of Oman to back up another threat by President Donald Trump to take military action against Iran, this time over the lack of progress in a nuclear deal. Tehran has vowed to respond to any attacks, which may spill over into the southern Red Sea controlled by Iran-supported Houthi militants. And that leaves carriers, and their customers, once again wondering when they will be able to safely transit the Red Sea/Suez route, more than two years after the Houthis began their attacks on commercial shipping. “Shippers are faced with the greatest challenges out there right now,” said Destine Ozuygur, senior market analyst at rate benchmarking platform Xeneta. “They're at the bottom of the operational decision funnel, which leaves them more vulnerable to shocks or setbacks than any other stakeholder in the equation.” Shippers, Ozuygur told the Journal of Commerce, are forced to create a procurement strategy that “rests on their ability to surmise the behavior of carriers, insurers, politicians (and) militias.” ”Even with a complex framework of decision-making tools, operational insights and the best data visibility out there, we can’t confidently predict the next six weeks, let alone the next six days in a scenario like this,” she said. The complexity that confounds shipping analysis was illustrated in developments this month. After two years of diversions around southern Africa, expectations that head-haul Suez voyages would likely resume after the Lunar New Year gathered momentum when Maersk on Jan. 15 announced that <a href="https://www.joc.com/article/maersk-set-to-resume-regular-suez-transits-on-india-usec-mecl-loop-sources-6152441">a Middle East-US East Coast service would be routed through the Red Sea</a>. But the ink was barely dry on that announcement when CMA CGM, one of the main Red Sea users over the past two years, said it would <a href="https://www.joc.com/article/cma-cgm-backs-off-plans-to-resume-suez-transits-for-asia-europe-services-6155264">scale back plans to send three Asia-Europe westbound services through the Suez</a>, citing the “complex and uncertain international context.” A week later, the Iran-backed Houthi released two videos warning that <a href="https://www.joc.com/article/latest-houthi-threat-renews-questions-about-suez-route-as-us-iran-tensions-rise-6158709">ship attacks could resume “soon,”</a> just days before the US carrier strike group led by the USS Abraham Lincoln arrived with Trump’s new attack threat on Tehran. <h3>Frustrating turn of events </h3>It has been a frustrating turn of events for shippers eager to return to the shorter Suez route. The Asia-based supply chain director for a European retailer said his company was planning for the resumption of Suez transits after Lunar New Year, which begins Feb. 17, following talks with carriers that were confident head-haul services would gradually increase. That confidence was fueled by the absence of any Houthi attacks since November, following the Israel-Hamas ceasefire the month before. “But the situation has changed again, and we are now not ready to put cargo through the Suez,” the source told the Journal of Commerce, adding that their insurance broker said cargo on ships routed through the Red Sea would not be covered in the event of an attack. Another European importer said his cargo was covered for Red Sea transits, but the high cost of premiums was prohibitive, something that remains a significant hurdle for both carriers and shippers. Marine insurance provider Allianz Commercial told the Journal of Commerce this week that cost increases for ships transiting areas requiring war insurance depended on the assessment of the Joint War Committee in London, comprised of underwriting representatives from Lloyd’s and the International Underwriting Association. ”The amount of the additional premiums can be very dynamic and is evaluated by individual underwriters, typically per vessel per voyage, and reflects current developments in individual shipping areas,” a spokesperson for Allianz said. But insurance issues extend beyond costs, according to Andy Gillespie, senior logistics advisor for supply chain management firm WOWL. Shippers sending cargo through the Red Sea would need to alert insurers and obtain specific rider coverage for shipments, but he said carrier alliance networks muddied the waters. “Think of this: The carrier I book and ship with is not transiting Suez but my container with them is on a partner's vessel that is transiting Suez,” Gillespie said. “It shouldn't be an issue to get the riders, but shippers better be alert to which shipments will be impacted. Carriers should be communicating the routings to customers.” <h3>Security concerns make visibility difficult </h3>But that kind of visibility from carriers would be difficult to provide under the fluid security situation, believes James Hookham, director of the Global Shippers Forum. “Whether shippers and forwarders will be able to pick a ship that transits the Suez will depend on the lines publishing a schedule of their intended routes, and that might be too much information in the public domain at this time,” he said. Ozuygur also had her doubts that shippers would have the visibility they need over voyages to establish their preferred strategies of shorter transit times/high risk compared to longer transits and lower risks. ”Then they must reconcile that against whether they believe the carrier will follow through on that promise, and then finally have a plan B and a plan C in place if things go sideways,” she said. ”That means having a close eye on service and voyage-level data across the entire network, access to expert analysis, and visibility into carriers’ track records of transparency, communication and reliability,” Ozuygur added. According to Drewry’s Red Sea Diversion Tracker, the number of container ships sailing via the Suez Canal jumped 69% to 61 in the two-week period ended Jan. 25, from a low base of 36 transits in the previous two-week period, as large carriers and smaller niche liners balanced the changing safety risk and the potential commercial benefit of the shorter route. Contact Greg Knowler at <a href="">greg.knowler@spglobal.com</a>. </div>

Shippers on the trades linking Asia to Europe and the US East Coast hoping for a resumption of Red Sea and Suez Canal transits remain at the mercy of factors out of their control as the regional security situation deteriorates anew. A US carrier strike group has arrived in the Gulf of Oman to back up another threat by President Donald Trump to take military action against Iran, this time over the lack of progress in a nuclear deal. Tehran has vowed to respond to any attacks, which may spill over into the southern Red Sea controlled by Iran-supported Houthi militants. And that leaves carriers, and their customers, once again wondering when they will be able to safely transit the Red Sea/Suez route, more than two years after the Houthis began their attacks on commercial shipping. “Shippers are faced with the greatest challenges out there right now,” said Destine Ozuygur, senior market analyst at rate benchmarking platform Xeneta. “They're at the bottom of the operational decision funnel, which leaves them more vulnerable to shocks or setbacks than any other stakeholder in the equation.” Shippers, Ozuygur told the Journal of Commerce, are forced to create a procurement strategy that “rests on their ability to surmise the behavior of carriers, insurers, politicians (and) militias.” ”Even with a complex framework of decision-making tools, operational insights and the best data visibility out there, we can’t confidently predict the next six weeks, let alone the next six days in a scenario like this,” she said. The complexity that confounds shipping analysis was illustrated in developments this month. After two years of diversions around southern Africa, expectations that head-haul Suez voyages would likely resume after the Lunar New Year gathered momentum when Maersk on Jan. 15 announced that a Middle East-US East Coast service would be routed through the Red Sea . But the ink was barely dry on that announcement when CMA CGM, one of the main Red Sea users over the past two years, said it would scale back plans to send three Asia-Europe westbound services through the Suez , citing the “complex and uncertain international context.” A week later, the Iran-backed Houthi released two videos warning that ship attacks could resume “soon,” just days before the US carrier strike group led by the USS Abraham Lincoln arrived with Trump’s new attack threat on Tehran. Frustrating turn of events It has been a frustrating turn of events for shippers eager to return to the shorter Suez route. The Asia-based supply chain director for a European retailer said his company was planning for the resumption of Suez transits after Lunar New Year, which begins Feb. 17, following talks with carriers that were confident head-haul services would gradually increase. That confidence was fueled by the absence of any Houthi attacks since November, following the Israel-Hamas ceasefire the month before. “But the situation has changed again, and we are now not ready to put cargo through the Suez,” the source told the Journal of Commerce, adding that their insurance broker said cargo on ships routed through the Red Sea would not be covered in the event of an attack. Another European importer said his cargo was covered for Red Sea transits, but the high cost of premiums was prohibitive, something that remains a significant hurdle for both carriers and shippers. Marine insurance provider Allianz Commercial told the Journal of Commerce this week that cost increases for ships transiting areas requiring war insurance depended on the assessment of the Joint War Committee in London, comprised of underwriting representatives from Lloyd’s and the International Underwriting Association. ”The amount of the additional premiums can be very dynamic and is evaluated by individual underwriters, typically per vessel per voyage, and reflects current developments in individual shipping areas,” a spokesperson for Allianz said. But insurance issues extend beyond costs, according to Andy Gillespie, senior logistics advisor for supply chain management firm WOWL. Shippers sending cargo through the Red Sea would need to alert insurers and obtain specific rider coverage for shipments, but he said carrier alliance networks muddied the waters. “Think of this: The carrier I book and ship with is not transiting Suez but my container with them is on a partner's vessel that is transiting Suez,” Gillespie said. “It shouldn't be an issue to get the riders, but shippers better be alert to which shipments will be impacted. Carriers should be communicating the routings to customers.” Security concerns make visibility difficult But that kind of visibility from carriers would be difficult to provide under the fluid security situation, believes James Hookham, director of the Global Shippers Forum. “Whether shippers and forwarders will be able to pick a ship that transits the Suez will depend on the lines publishing a schedule of their intended routes, and that might be too much information in the public domain at this time,” he said. Ozuygur also had her doubts that shippers would have the visibility they need over voyages to establish their preferred strategies of shorter transit times/high risk compared to longer transits and lower risks. ”Then they must reconcile that against whether they believe the carrier will follow through on that promise, and then finally have a plan B and a plan C in place if things go sideways,” she said. ”That means having a close eye on service and voyage-level data across the entire network, access to expert analysis, and visibility into carriers’ track records of transparency, communication and reliability,” Ozuygur added. According to Drewry’s Red Sea Diversion Tracker, the number of container ships sailing via the Suez Canal jumped 69% to 61 in the two-week period ended Jan. 25, from a low base of 36 transits in the previous two-week period, as large carriers and smaller niche liners balanced the changing safety risk and the potential commercial benefit of the shorter route. Contact Greg Knowler at  greg.knowler@spglobal.com . 

Container lines

Asia-Europe

Container Shipping News

Shippers shoulder burden of Red Sea uncertainty as regional tensions rise again 

<div class="phx-topic abstract-wrapper">Stonepeak will pay $2.4 billion to take a 25% stake in the United Ports JV while the French carrier will hold 75% and maintain operational control of the terminals involved. </div>

Stonepeak will pay $2.4 billion to take a 25% stake in the United Ports JV while the French carrier will hold 75% and maintain operational control of the terminals involved.

<div class="phx-topic">CMA CGM and private equity firm Stonepeak on Wednesday said they’ve formed a global marine terminals joint venture that involves 11 of the carrier’s major port assets in the US, South America, Europe, and Asia. Stonepeak will pay $2.4 billion to take a 25% stake in the JV, known as United Ports LLC. CMA CGM will hold 75% and maintain operational control of the terminals. The sale to Stonepeak puts the value of the terminals venture at $9.6 billion.“By joining forces with a partner with strong infrastructure expertise, we strengthen our ability to invest further in our port terminals, secure access to key gateways and enhance service quality for our customers,” CMA CGM Chief Executive Rodolphe Saadé said in a statement. Under the deal, Stonepeak has the option to contribute $3.6 billion in additional funding for future joint terminal projects, while CMA CGM said it will reinvest the initial $2.4 billion from the minority stake sale into its core business. The United Ports JV comes about 11 months after Saadé visited US President Donald Trump at the White House and <a href="https://www.joc.com/article/cma-cgm-to-invest-20-billion-in-us-shipping-ports-and-logistics-5957748">announced CMA CGM would spend $20 billion</a> over the next four years to significantly bolster its logistics presence in the US, including port assets. <h3>Los Angeles, New York terminals part of JV </h3>In the US, the terminals that will be part of the United Ports joint venture are the Fenix Marine Services (FMS) terminal in Los Angeles, and the Port Liberty Terminals in Bayonne, New Jersey. and Staten Island. United Ports will also include four container terminals in Spain: CSP Valencia, CSP Bilbao, Terminal Maritima de Guadalquivir, and TTI Algeciras. Other terminals in the joint venture include Brazil’s Santos terminal, CMA CGM’s Kaohsiung terminal in Taiwan, Nhava Sheva Freeport in India, and Vietnam’s Gemalink terminal in Cai Mep. Stonepeak is a major investor in container logistics and related infrastructure. It owns chassis provider TRAC Intermodal and has invested in cold-storage operator Lineage, container lessor Textainer and breakbulk terminal operator Logistec. “Container terminals play an essential role in global trade and are among the most difficult to substitute or replicate transportation infrastructure assets,” James Wyper, senior managing director and head of US private equity for Stonepeak, said in the statement. CMA CGM operates 41 terminals globally, according to its website, handling over 17 million TEUs annually. CMA CGM is also the majority owner of Terminal Link, a joint venture with China Merchants Port Holdings, that operates 21 terminals handling 29 million TEUs. Much of the CMA CGM terminals portfolio has been assembled since the pandemic, providing the ocean carrier a homeport in major markets. In 2021, <a href="https://www.joc.com/article/cma-cgm-flexes-financial-might-with-fenix-marine-acquisition-5206339">it purchased the 90% share it did not already own in Fenix Marine</a>, which alone had a $2.3 billion enterprise value, according to CMA CGM. The following year, <a href="https://www.joc.com/article/cma-cgm-adds-terminal-assets-in-new-yorknew-jersey-5217593">it bought out Global Container Terminals’ leases for the Bayonne and Staten Island terminals</a>. CMA CGM terminals also formed a joint venture in 2022 with India’s JM Baxi Group for a 30-year concession on the Nhava Sheva terminal. Last year, CMA CGM began a public tender offer <a href="https://www.joc.com/article/cma-cgm-becomes-majority-shareholder-in-santos-brasil-terminal-operator-5991343">for the remaining stake it did not own in the Santos terminal</a>, a deal worth about $2.3 billion. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

CMA CGM and private equity firm Stonepeak on Wednesday said they’ve formed a global marine terminals joint venture that involves 11 of the carrier’s major port assets in the US, South America, Europe, and Asia. Stonepeak will pay $2.4 billion to take a 25% stake in the JV, known as United Ports LLC. CMA CGM will hold 75% and maintain operational control of the terminals. The sale to Stonepeak puts the value of the terminals venture at $9.6 billion. “By joining forces with a partner with strong infrastructure expertise, we strengthen our ability to invest further in our port terminals, secure access to key gateways and enhance service quality for our customers,” CMA CGM Chief Executive Rodolphe Saadé said in a statement. Under the deal, Stonepeak has the option to contribute $3.6 billion in additional funding for future joint terminal projects, while CMA CGM said it will reinvest the initial $2.4 billion from the minority stake sale into its core business. The United Ports JV comes about 11 months after Saadé visited US President Donald Trump at the White House and announced CMA CGM would spend $20 billion over the next four years to significantly bolster its logistics presence in the US, including port assets. Los Angeles, New York terminals part of JV In the US, the terminals that will be part of the United Ports joint venture are the Fenix Marine Services (FMS) terminal in Los Angeles, and the Port Liberty Terminals in Bayonne, New Jersey. and Staten Island. United Ports will also include four container terminals in Spain: CSP Valencia, CSP Bilbao, Terminal Maritima de Guadalquivir, and TTI Algeciras. Other terminals in the joint venture include Brazil’s Santos terminal, CMA CGM’s Kaohsiung terminal in Taiwan, Nhava Sheva Freeport in India, and Vietnam’s Gemalink terminal in Cai Mep. Stonepeak is a major investor in container logistics and related infrastructure. It owns chassis provider TRAC Intermodal and has invested in cold-storage operator Lineage, container lessor Textainer and breakbulk terminal operator Logistec. “Container terminals play an essential role in global trade and are among the most difficult to substitute or replicate transportation infrastructure assets,” James Wyper, senior managing director and head of US private equity for Stonepeak, said in the statement. CMA CGM operates 41 terminals globally, according to its website, handling over 17 million TEUs annually. CMA CGM is also the majority owner of Terminal Link, a joint venture with China Merchants Port Holdings, that operates 21 terminals handling 29 million TEUs. Much of the CMA CGM terminals portfolio has been assembled since the pandemic, providing the ocean carrier a homeport in major markets. In 2021, it purchased the 90% share it did not already own in Fenix Marine , which alone had a $2.3 billion enterprise value, according to CMA CGM. The following year, it bought out Global Container Terminals’ leases for the Bayonne and Staten Island terminals . CMA CGM terminals also formed a joint venture in 2022 with India’s JM Baxi Group for a 30-year concession on the Nhava Sheva terminal. Last year, CMA CGM began a public tender offer for the remaining stake it did not own in the Santos terminal , a deal worth about $2.3 billion. Contact Michael Angell at michael.angell@spglobal.com .

Port News

North American ports

Marine terminals

International ports

CMA CGM forms global terminals venture with private equity firm

<div class="phx-topic abstract-wrapper">The parcel giant saw its forwarding and third-party logistics business drop in the fourth quarter due to higher tariffs, and says the weakness will carry over into the first quarter of 2026. </div>

The parcel giant saw its forwarding and third-party logistics business drop in the fourth quarter due to higher tariffs, and says the weakness will carry over into the first quarter of 2026.

<div class="phx-topic">United Parcel Service saw financial results in its supply chain division fall during the fourth quarter of 2025 amid the pullback in international freight. Although it expects results to improve through the year, UPS said the first quarter of 2026 is still being buffeted by last year’s big changes to US trade policy. UPS reported Monday that its supply chain business saw fourth-quarter revenue decline 12.7% to $2.7 billion, largely due to the impact of lower rates in its air and ocean forwarding business. The segment was also hit with lower volumes for delivering parcel shipments to the US Postal Service. Operating income for the segment rose 16% thanks to last year’s acquisition of healthcare logistics provider Andlauer, and strong growth in reverse supply chain solutions and in its same-day delivery app usage. The company’s parcel business saw a slight decline in the fourth quarter as higher revenue in its international business rose but could not offset the volume and revenue declines in its US parcel business. <h3>Expects ‘extreme weakness’ in international business </h3>During an earnings call Monday, UPS CFO Brian Dykes said the company’s results are still being impacted by higher US tariffs, the Trump administration’s threats to existing trade agreements with Canada and Mexico, and the end of tariff-free shipments on low-value, international goods that came into the US under the de minimis exemption. Dykes said the company is expecting “extreme weakness” in its international business during the first quarter due to changing North American trade flows and the higher tariffs the US put on Chinese goods. While UPS is pivoting to handle shipments from other Asian countries to the US, the margins on that business are not as high as its China-to-US business. “There was a lot of pressure both from Canada and Mexico, as well as continued decline in our China-to-US lanes, and really all of our US inbound lanes,” Dykes said. “That’s going to roll over into the first quarter as well.” “We are going to see extreme weakness in the first quarter that kind of gradually recovers,” he added. “We will lap the tariff impact in May and start to see positive growth from that. And then we’ll lap the de minimis impact in September.” Dykes said the UPS supply chain business should grow by high single-digits in 2026, thanks in part to the Andlauer acquisition. “[But] looking at the first quarter, we expect revenue to be approximately flat with a year-over-year decline in operating profit due to changes in trade lanes and tough comps from the front-running of tariffs and de minimis changes in 2025,” he said. UPS said it’s responding to the changing trade environment by investing outside of US trade lanes. UPS Vice President Kathleen Gutmann said on the call the company has a new air hub in Vietnam that’s operating at 80% capacity. She said the company is still seeing double-digit growth for shipments out of Asia, but “they’re going to Europe and India.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.</div>

United Parcel Service saw financial results in its supply chain division fall during the fourth quarter of 2025 amid the pullback in international freight. Although it expects results to improve through the year, UPS said the first quarter of 2026 is still being buffeted by last year’s big changes to US trade policy. UPS reported Monday that its supply chain business saw fourth-quarter revenue decline 12.7% to $2.7 billion, largely due to the impact of lower rates in its air and ocean forwarding business. The segment was also hit with lower volumes for delivering parcel shipments to the US Postal Service. Operating income for the segment rose 16% thanks to last year’s acquisition of healthcare logistics provider Andlauer, and strong growth in reverse supply chain solutions and in its same-day delivery app usage. The company’s parcel business saw a slight decline in the fourth quarter as higher revenue in its international business rose but could not offset the volume and revenue declines in its US parcel business. Expects ‘extreme weakness’ in international business During an earnings call Monday, UPS CFO Brian Dykes said the company’s results are still being impacted by higher US tariffs, the Trump administration’s threats to existing trade agreements with Canada and Mexico, and the end of tariff-free shipments on low-value, international goods that came into the US under the de minimis exemption. Dykes said the company is expecting “extreme weakness” in its international business during the first quarter due to changing North American trade flows and the higher tariffs the US put on Chinese goods. While UPS is pivoting to handle shipments from other Asian countries to the US, the margins on that business are not as high as its China-to-US business. “There was a lot of pressure both from Canada and Mexico, as well as continued decline in our China-to-US lanes, and really all of our US inbound lanes,” Dykes said. “That’s going to roll over into the first quarter as well.” “We are going to see extreme weakness in the first quarter that kind of gradually recovers,” he added. “We will lap the tariff impact in May and start to see positive growth from that. And then we’ll lap the de minimis impact in September.” Dykes said the UPS supply chain business should grow by high single-digits in 2026, thanks in part to the Andlauer acquisition. “[But] looking at the first quarter, we expect revenue to be approximately flat with a year-over-year decline in operating profit due to changes in trade lanes and tough comps from the front-running of tariffs and de minimis changes in 2025,” he said. UPS said it’s responding to the changing trade environment by investing outside of US trade lanes. UPS Vice President Kathleen Gutmann said on the call the company has a new air hub in Vietnam that’s operating at 80% capacity. She said the company is still seeing double-digit growth for shipments out of Asia, but “they’re going to Europe and India.” Contact Michael Angell at michael.angell@spglobal.com .

Air Cargo Carriers News

Air Cargo

Supply chain

Changes in US trade policy hitting UPS’ supply chain business

<div class="phx-topic abstract-wrapper">Railroads are restricting train speeds and building shorter trains to reduce the potential for breakdowns and derailments in the bitter cold. </div>

Railroads are restricting train speeds and building shorter trains to reduce the potential for breakdowns and derailments in the bitter cold.

<div class="phx-topic">US Class I railroads on Wednesday remained in recovery mode after severe winter weather impacted a large swath of the country over the weekend, with shippers seeing delays as trains operate at slower speeds as a safety precaution. Railroads have also shortened the average train length to prevent equipment breakdowns in frigid temperatures. Frontline workers must inspect tracks, which contract in the extreme cold and could result in a derailment if not caught in time. Terminals must also slow operations because overhead cranes, lift machines, and hostlers that move containers within the facilities are susceptible to malfunctioning in the cold. Union Pacific Railroad (UP) said the biggest disruptions are happening in Arkansas, Louisiana and Texas, impacting trains to Dallas-Ft. Worth, New Orleans, and Shreveport. There have also been disruptions in Little Rock, Arkansas, where UP handles non-intermodal manifest trains. UP said the West Coast was not impacted, while the northern part of its network recovered quickly. “In that central-east and southern part, they’ve done a spectacular job of recovering,” UP CEO Jim Vena said Tuesday during the company’s fourth-quarter earnings call. “Where it would have taken us weeks to get back [to normal], we should see that ... after a few days.” The railroad said it was 70% recovered as of Tuesday and should be back to normal in terms of infrastructure on Thursday or Friday. BNSF Railway saw the biggest impact on terminals in Haslet, outside of Dallas-Ft. Worth, and Memphis. COFC Logistics, a partner of BNSF for domestic intermodal, warned customers to expect delays getting domestic boxes through those two terminals in the short term. “The overall network is expected to stabilize by the end of the week, with full recovery anticipated early next week,” COFC wrote in an advisory to customers Tuesday afternoon. “Crews continue working through lingering ice in Tulsa, Memphis, and North Fort Worth. Another surge of arctic air is expected Friday into Saturday, and BNSF is positioning additional locomotives where train‑length restrictions will be required.” Norfolk Southern Railway suspended the lifting of international containers on and off trucks in Atlanta on Sunday and Monday, extending free time for any impacted cargo owners. It has since returned to normal operations. <h3>Cutting train lengths </h3>Aside from slowing trains for safety, railroads are running shorter trains because various components such as air and brake systems, bearings, wheels, and locomotives can freeze, crack, or lose power in extreme cold. The longer the train, the greater the risk. Data from rail visibility platform RailState shows the median intermodal train length fell more than 20% in Ohio, 10% in Pennsylvania and 1.4% in Indiana on Sunday and Monday compared with before the storm. In the case of Ohio, the median train length is 1,479 feet shorter post-storm versus pre-storm, which equates to approximately 25 fewer containers on a single-stack train, or 50 boxes if containers are piled two high. The result is that more boxes will be left behind at origin, which means slower trains and longer dwells will create more delays for intermodal shippers in the impacted regions. <h3>Storm impact on truck market </h3>Meanwhile, it is likely the truckload spot market will see an upward pop in rates due to the snowstorm, much like after a hurricane or tornado. Data from providers such as DAT Freight and Analytics is calculated on a rolling three-day and seven-day average, so more information should be available in the coming days. Ken Adamo, DAT’s chief of analytics, does not believe the impact will be as severe as February 2021 when snow, ice, frigid temperatures, and a prolonged blackout in Texas gridlocked truck and rail freight for weeks. “Beyond the precipitation and blowing snow, the deep arctic chill that has settled into a large portion of the country has spiked demand for protect-from-freeze loads and slowed storm cleanup,” Adamo wrote on LinkedIn Wednesday morning. “As a result, the seasonal freefall of rates has abated and shot back up.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>.</div>

US Class I railroads on Wednesday remained in recovery mode after severe winter weather impacted a large swath of the country over the weekend, with shippers seeing delays as trains operate at slower speeds as a safety precaution. Railroads have also shortened the average train length to prevent equipment breakdowns in frigid temperatures. Frontline workers must inspect tracks, which contract in the extreme cold and could result in a derailment if not caught in time. Terminals must also slow operations because overhead cranes, lift machines, and hostlers that move containers within the facilities are susceptible to malfunctioning in the cold. Union Pacific Railroad (UP) said the biggest disruptions are happening in Arkansas, Louisiana and Texas, impacting trains to Dallas-Ft. Worth, New Orleans, and Shreveport. There have also been disruptions in Little Rock, Arkansas, where UP handles non-intermodal manifest trains. UP said the West Coast was not impacted, while the northern part of its network recovered quickly. “In that central-east and southern part, they’ve done a spectacular job of recovering,” UP CEO Jim Vena said Tuesday during the company’s fourth-quarter earnings call. “Where it would have taken us weeks to get back [to normal], we should see that ... after a few days.” The railroad said it was 70% recovered as of Tuesday and should be back to normal in terms of infrastructure on Thursday or Friday. BNSF Railway saw the biggest impact on terminals in Haslet, outside of Dallas-Ft. Worth, and Memphis. COFC Logistics, a partner of BNSF for domestic intermodal, warned customers to expect delays getting domestic boxes through those two terminals in the short term. “The overall network is expected to stabilize by the end of the week, with full recovery anticipated early next week,” COFC wrote in an advisory to customers Tuesday afternoon. “Crews continue working through lingering ice in Tulsa, Memphis, and North Fort Worth. Another surge of arctic air is expected Friday into Saturday, and BNSF is positioning additional locomotives where train‑length restrictions will be required.” Norfolk Southern Railway suspended the lifting of international containers on and off trucks in Atlanta on Sunday and Monday, extending free time for any impacted cargo owners. It has since returned to normal operations. Cutting train lengths Aside from slowing trains for safety, railroads are running shorter trains because various components such as air and brake systems, bearings, wheels, and locomotives can freeze, crack, or lose power in extreme cold. The longer the train, the greater the risk. Data from rail visibility platform RailState shows the median intermodal train length fell more than 20% in Ohio, 10% in Pennsylvania and 1.4% in Indiana on Sunday and Monday compared with before the storm. In the case of Ohio, the median train length is 1,479 feet shorter post-storm versus pre-storm, which equates to approximately 25 fewer containers on a single-stack train, or 50 boxes if containers are piled two high. The result is that more boxes will be left behind at origin, which means slower trains and longer dwells will create more delays for intermodal shippers in the impacted regions. Storm impact on truck market Meanwhile, it is likely the truckload spot market will see an upward pop in rates due to the snowstorm, much like after a hurricane or tornado. Data from providers such as DAT Freight and Analytics is calculated on a rolling three-day and seven-day average, so more information should be available in the coming days. Ken Adamo, DAT’s chief of analytics, does not believe the impact will be as severe as February 2021 when snow, ice, frigid temperatures, and a prolonged blackout in Texas gridlocked truck and rail freight for weeks. “Beyond the precipitation and blowing snow, the deep arctic chill that has settled into a large portion of the country has spiked demand for protect-from-freeze loads and slowed storm cleanup,” Adamo wrote on LinkedIn Wednesday morning. “As a result, the seasonal freefall of rates has abated and shot back up.” Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

Surface

US rail networks recovering after weekend snowstorm, but delays persist

<div class="phx-topic abstract-wrapper">The latest in a series of extreme winter storms is blowing through the region, this one in southwestern Europe that is suspending terminal operations and halting ferry traffic. </div>

The latest in a series of extreme winter storms is blowing through the region, this one in southwestern Europe that is suspending terminal operations and halting ferry traffic.

<div class="phx-topic">Gale force winds and heavy seas across southwestern Europe have forced container terminals in the West Mediterranean hubs of Tanger-Med and Algeciras to suspend operations. A severe Atlantic storm hit the region earlier this week and is expected to intensify in the coming days and move northward, with gale warnings issued in the Bay of Biscay and the UK. “Terminals in the West Mediterranean have stopped operations with no clear indication of when operations can start again,” Maersk told customers in an advisory Wednesday, warning that weather conditions are expected to worsen. “This situation is affecting the entire industry, and due to the severity and uncertainty of the conditions, we expect delays and closures to continue to impact vessels and terminals across the board,” the carrier added. Waves of up to seven meters on the Atlantic coast and in the Strait of Gibraltar have also halted all ferry traffic between Tangier and southern Spain, with logistics providers reporting a significant buildup of cargo trucks at the Spanish hub of Algeciras. <h3>Weather disruptions in Northern Europe </h3>Europe has been battered by a series of severe winter storms in January, with extreme weather conditions also <a href="https://www.joc.com/article/severe-winter-storm-disrupts-north-europe-port-inland-operations-6148334">disrupting terminal operations at Hamburg, Rotterdam and Antwerp</a>. Kuehne + Nagel’s visibility platform SeaExplorer is reporting “heavily disrupted operations” at Hamburg, with trucks backed up at the CTA and CTB terminals. SeaExplorer said low temperatures are forecast for the rest of this week, and current transport conditions are expected to remain. Freezing temperatures, snow and ice are also impacting terminal and landside operations at Maersk’s Polish hub of Gdansk. “Frozen equipment, together with snow and ice on the roads and railways, are restricting the delivery and collection of cargo,” Maersk said in a separate customer advisory Wednesday. “Truck slots are fully booked, and trains are being delayed or canceled,” the carrier said. “Waterside cargo operations are limited, with reduced container moves per hour due to heavy snowfall and frozen equipment.” Contact Greg Knowler at <a href="">greg.knowler@spglobal.com</a>. </div>

Gale force winds and heavy seas across southwestern Europe have forced container terminals in the West Mediterranean hubs of Tanger-Med and Algeciras to suspend operations. A severe Atlantic storm hit the region earlier this week and is expected to intensify in the coming days and move northward, with gale warnings issued in the Bay of Biscay and the UK. “Terminals in the West Mediterranean have stopped operations with no clear indication of when operations can start again,” Maersk told customers in an advisory Wednesday, warning that weather conditions are expected to worsen. “This situation is affecting the entire industry, and due to the severity and uncertainty of the conditions, we expect delays and closures to continue to impact vessels and terminals across the board,” the carrier added. Waves of up to seven meters on the Atlantic coast and in the Strait of Gibraltar have also halted all ferry traffic between Tangier and southern Spain, with logistics providers reporting a significant buildup of cargo trucks at the Spanish hub of Algeciras. Weather disruptions in Northern Europe Europe has been battered by a series of severe winter storms in January, with extreme weather conditions also disrupting terminal operations at Hamburg, Rotterdam and Antwerp . Kuehne + Nagel’s visibility platform SeaExplorer is reporting “heavily disrupted operations” at Hamburg, with trucks backed up at the CTA and CTB terminals. SeaExplorer said low temperatures are forecast for the rest of this week, and current transport conditions are expected to remain. Freezing temperatures, snow and ice are also impacting terminal and landside operations at Maersk’s Polish hub of Gdansk. “Frozen equipment, together with snow and ice on the roads and railways, are restricting the delivery and collection of cargo,” Maersk said in a separate customer advisory Wednesday. “Truck slots are fully booked, and trains are being delayed or canceled,” the carrier said. “Waterside cargo operations are limited, with reduced container moves per hour due to heavy snowfall and frozen equipment.” Contact Greg Knowler at  greg.knowler@spglobal.com . 

New Atlantic storm shuts West Mediterranean container hubs

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