<div class="phx-topic abstract-wrapper">Container shipowner Seaspan said it is negotiating to order up to 10 new ships that would carry up to 10,000 20-foot equivalent units each and have “an innovative design that focuses on improving load</div>

Container shipowner Seaspan said it is negotiating to order up to 10 new ships that would carry up to 10,000 20-foot equivalent units each and have “an innovative design that focuses on improving load

<div>Container shipowner Seaspan said it is negotiating to order up to 10 new ships that would carry up to 10,000 20-foot equivalent units each and have “an innovative design that focuses on improving loadability and fuel efficiency.” Seaspan is in discussions with several Chinese and Korean shipyards about the possible orders for delivery in 2013 and 2014, the company said in a document filed with the Securities and Exchange Commission. The company’s CEO, Gerry Wang, has called for shipyards and naval architects to develop new container ship designs that improve fuel and operating efficiency. Super-Sized Container Ship news from JOC:<a>Maersk...

Container shipowner Seaspan said it is negotiating to order up to 10 new ships that would carry up to 10,000 20-foot equivalent units each and have “an innovative design that focuses on improving loadability and fuel efficiency.” Seaspan is in discussions with several Chinese and Korean shipyards about the possible orders for delivery in 2013 and 2014, the company said in a document filed with the Securities and Exchange Commission. The company’s CEO, Gerry Wang, has called for shipyards and naval architects to develop new container ship designs that improve fuel and operating efficiency. Super-Sized Container Ship news from JOC: Maersk Buys 10 Super-Sized Container Ships Seaspan charters ships to container ship lines including Maersk, China Shippnig, CSAV, Cosco, Hapag-Lloyd, “K” Line, MOL and United Arab Shipping Co. The company has 57 container ships and an additional 12 scheduled for delivery through March 2012. This month the company announced the delivery of its 56th and 57th container ships, the 4,500-TEU Brevik Bridge and Bilbao Bridge. The ships were built by Samsung Heavy Industries in Korea and chartered to “K” Line for 12 years with options for an additional six years. -- Contact Joseph Bonney at jbonney@joc.com .

Maritime

Container lines

Forwarding

Seaspan Seeks 10 New 10,000-TEU Ships

<div class="phx-topic abstract-wrapper">Ports closest to the Persian Gulf are under mounting pressure with a second round of containers inbound as carriers start to offload cargo that was already on the water last week when Middle East bookings were canceled.</div>

Ports closest to the Persian Gulf are under mounting pressure with a second round of containers inbound as carriers start to offload cargo that was already on the water last week when Middle East bookings were canceled.

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<div class="phx-topic">Congestion from unexpected volumes is building at container ports outside the war-torn Persian Gulf as cargo that was en route to ports located on the west side of the narrow Strait of Hormuz is discharged early. Ports across the Persian Gulf — including regional transhipment powerhouse Jebel Ali, Abu Dhabi, Doha and Kuwait — were shut down after the US launched air strikes on Iran on Feb. 28. Some of the ports have since resumed operations, but vessel arrivals remain limited as the war rages on. Bottlenecks are growing at ports closest to the Persian Gulf with mounting congestion at Khor Fakkan on the eastern coast of the United Arab Emirates, Sohar in Oman, Karachi in Pakistan and Mundra and Nhava Sheva in India, according to Destine Ozuygur, senior market analyst at rate benchmarking platform Xeneta. “Essentially, it’s still a matter of ‘how close can we get to our original destination without putting our crews at risk and what does our insurance coverage allow?’” she told the Journal of Commerce Tuesday. Another wave of containers is inbound as carriers look for ports to discharge cargo that had already departed Asia when booking suspensions were announced for the ports in the UAE, Oman, Iraq, Kuwait, Jordan, Qatar, Bahrain and Saudi Arabia. “[The containers] will be split with some discharging at major transshipment hubs like Singapore, Colombo [Sri Lanka] and Tanjung Pelepas [Malaysia] and others trying to get closer to Indian ports or even to the east coast of the UAE,” she said. “But at this stage the closer you get to the conflict, the more you can expect to face delays.” According to a Xeneta analysis of AIS vessel positioning data and the number of services at each port, Karachi is currently 80% congested, with average wait times of 2.5 days; Sohar is 100% congested, with average waits of 5.9 days; and Khor Fakkan is at 100%. Nhava Sheva is currently at 57%, with average wait times of 2.8 days, well above the norm for this port, while Mundra is currently at 55%, with vessels waiting two days on average. Aden has gone from being relatively uncongested to between 77% and 100% since March 3 and is currently at 88%, with average wait times of nine days. <h3>Containers trapped inside Persian Gulf </h3>The US launched an intense wave of air strikes on Iran on Feb. 28 with Tehran retaliating, swiftly plunging the region into a no-go area for air and ocean transport. Container terminals and airports across the Persian Gulf shut down as Iran targeted US bases in the UAE, Oman and Bahrain. While the regional hub of Jebel Ali in the UAE is now operational, an advisory from Crane Worldwide Logistics notes that vessel arrivals remain limited due to network disruption and the high cost of war risk insurance for any vessel attempting to pass through the Strait of Hormuz. Sea-Intelligence Maritime Analysis noted that 47 regular deep-sea services call at ports within the Persian Gulf, generating a combined 336 individual port calls in January that represented a total nominal capacity of 1.32 million TEUs entering the region. Half of all the port calls were made at Jebel Ali. Based on that data, the analyst estimated that 204,159 TEUs of capacity remains trapped inside the Persian Gulf, and with no safe routes into or out of the region, this will inevitably lead to equipment shortages in Asia. “The Persian Gulf is structurally a net-import region for containerized cargo,” Sea-Intelligence wrote in its Sunday Spotlight newsletter, with deep-sea services discharging laden imports and loading empty boxes to reposition back to Asian manufacturing hubs. “By trapping over 200,000 TEUs of capacity — and the physical boxes sitting on those vessels and in Gulf terminals — the closure simultaneously starves Asian export hubs of vital equipment, potentially causing container shortages in the Far East,” Sea-Intelligence CEO Alan Murphy warned. The Asia-Europe trades are already facing a growing equipment imbalance from persistent congestion at European hub ports, and Container Trades Statistics (CTS) CEO Nigel Pusey warned that the US-Iran war will worsen the situation. “The Middle East and India are interwoven into many schedules of many carriers, so there is going to be a massive impact,” Pusey told the Journal of Commerce’s TPM26 conference in Long Beach. “It’s probably far too early to say what’s going to happen, but the imbalance is going to get far worse.” <h3>Rates, volatility on the rise </h3>Meanwhile, rate increases into India, Egypt and East Mediterranean ports are reflecting the conflict-driven disruption in the Middle East. Since Feb. 28, rates from Asia to India are up almost 30% and Asia-East Mediterranean are up 11%, according to Xeneta. Carriers are also hitting shippers with significant surcharges that range between $2,500 and $3,500 per TEU. “Due to the volatility of the ongoing situation, there is a need for alternative solutions to bringing your cargo to final destination, including finding alternative routing and storage in transit,” Maersk noted in an update Monday. The Maersk emergency freight rate of $3,000 per FEU will be charged on cargo to or from ports in Iraq, Kuwait, Damman and Jubai in Saudi Arabia, Bahrain, Qatar, the UAE and Oman, except Salalah, and covers 14 days of storage in transit. The closure of the Strait of Hormuz, a strategic chokepoint for global energy and trade flows, has triggered volatility in oil and LNG markets and halted shipping through a route responsible for a significant share of global energy exports. Ben Farrell, CEO of the Chartered Institute of Procurement and Supply (CIPS), said disruption in such a critical region was rippling rapidly across industries, markets and continents. “This is not just about shipping routes; it is about energy security, global manufacturing and the cost of moving goods around the world,” he said in a statement Tuesday. “Supply chains are more resilient than they were five years ago, but prolonged disruption in such a critical corridor will inevitably create cost pressures and operational challenges across the global economy.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Congestion from unexpected volumes is building at container ports outside the war-torn Persian Gulf as cargo that was en route to ports located on the west side of the narrow Strait of Hormuz is discharged early. Ports across the Persian Gulf — including regional transhipment powerhouse Jebel Ali, Abu Dhabi, Doha and Kuwait — were shut down after the US launched air strikes on Iran on Feb. 28. Some of the ports have since resumed operations, but vessel arrivals remain limited as the war rages on. Bottlenecks are growing at ports closest to the Persian Gulf with mounting congestion at Khor Fakkan on the eastern coast of the United Arab Emirates, Sohar in Oman, Karachi in Pakistan and Mundra and Nhava Sheva in India, according to Destine Ozuygur, senior market analyst at rate benchmarking platform Xeneta. “Essentially, it’s still a matter of ‘how close can we get to our original destination without putting our crews at risk and what does our insurance coverage allow?’” she told the Journal of Commerce Tuesday. Another wave of containers is inbound as carriers look for ports to discharge cargo that had already departed Asia when booking suspensions were announced for the ports in the UAE, Oman, Iraq, Kuwait, Jordan, Qatar, Bahrain and Saudi Arabia. “[The containers] will be split with some discharging at major transshipment hubs like Singapore, Colombo [Sri Lanka] and Tanjung Pelepas [Malaysia] and others trying to get closer to Indian ports or even to the east coast of the UAE,” she said. “But at this stage the closer you get to the conflict, the more you can expect to face delays.” According to a Xeneta analysis of AIS vessel positioning data and the number of services at each port, Karachi is currently 80% congested, with average wait times of 2.5 days; Sohar is 100% congested, with average waits of 5.9 days; and Khor Fakkan is at 100%. Nhava Sheva is currently at 57%, with average wait times of 2.8 days, well above the norm for this port, while Mundra is currently at 55%, with vessels waiting two days on average. Aden has gone from being relatively uncongested to between 77% and 100% since March 3 and is currently at 88%, with average wait times of nine days. Containers trapped inside Persian Gulf The US launched an intense wave of air strikes on Iran on Feb. 28 with Tehran retaliating, swiftly plunging the region into a no-go area for air and ocean transport. Container terminals and airports across the Persian Gulf shut down as Iran targeted US bases in the UAE, Oman and Bahrain. While the regional hub of Jebel Ali in the UAE is now operational, an advisory from Crane Worldwide Logistics notes that vessel arrivals remain limited due to network disruption and the high cost of war risk insurance for any vessel attempting to pass through the Strait of Hormuz. Sea-Intelligence Maritime Analysis noted that 47 regular deep-sea services call at ports within the Persian Gulf, generating a combined 336 individual port calls in January that represented a total nominal capacity of 1.32 million TEUs entering the region. Half of all the port calls were made at Jebel Ali. Based on that data, the analyst estimated that 204,159 TEUs of capacity remains trapped inside the Persian Gulf, and with no safe routes into or out of the region, this will inevitably lead to equipment shortages in Asia. “The Persian Gulf is structurally a net-import region for containerized cargo,” Sea-Intelligence wrote in its Sunday Spotlight newsletter, with deep-sea services discharging laden imports and loading empty boxes to reposition back to Asian manufacturing hubs. “By trapping over 200,000 TEUs of capacity — and the physical boxes sitting on those vessels and in Gulf terminals — the closure simultaneously starves Asian export hubs of vital equipment, potentially causing container shortages in the Far East,” Sea-Intelligence CEO Alan Murphy warned. The Asia-Europe trades are already facing a growing equipment imbalance from persistent congestion at European hub ports, and Container Trades Statistics (CTS) CEO Nigel Pusey warned that the US-Iran war will worsen the situation. “The Middle East and India are interwoven into many schedules of many carriers, so there is going to be a massive impact,” Pusey told the Journal of Commerce’s TPM26 conference in Long Beach. “It’s probably far too early to say what’s going to happen, but the imbalance is going to get far worse.” Rates, volatility on the rise Meanwhile, rate increases into India, Egypt and East Mediterranean ports are reflecting the conflict-driven disruption in the Middle East. Since Feb. 28, rates from Asia to India are up almost 30% and Asia-East Mediterranean are up 11%, according to Xeneta. Carriers are also hitting shippers with significant surcharges that range between $2,500 and $3,500 per TEU. “Due to the volatility of the ongoing situation, there is a need for alternative solutions to bringing your cargo to final destination, including finding alternative routing and storage in transit,” Maersk noted in an update Monday. The Maersk emergency freight rate of $3,000 per FEU will be charged on cargo to or from ports in Iraq, Kuwait, Damman and Jubai in Saudi Arabia, Bahrain, Qatar, the UAE and Oman, except Salalah, and covers 14 days of storage in transit. The closure of the Strait of Hormuz, a strategic chokepoint for global energy and trade flows, has triggered volatility in oil and LNG markets and halted shipping through a route responsible for a significant share of global energy exports. Ben Farrell, CEO of the Chartered Institute of Procurement and Supply (CIPS), said disruption in such a critical region was rippling rapidly across industries, markets and continents. “This is not just about shipping routes; it is about energy security, global manufacturing and the cost of moving goods around the world,” he said in a statement Tuesday. “Supply chains are more resilient than they were five years ago, but prolonged disruption in such a critical corridor will inevitably create cost pressures and operational challenges across the global economy.” Contact Greg Knowler at greg.knowler@spglobal.com .

Port News

Asia-Europe

International ports

Waves of diverted containers swamping Middle East ports

<div class="phx-topic abstract-wrapper">Carriers have defended rate increases for shipments out of Asia and elsewhere, citing the higher cost of operating when tonnage and equipment are tied up in the Middle East due to the war. </div>

Carriers have defended rate increases for shipments out of Asia and elsewhere, citing the higher cost of operating when tonnage and equipment are tied up in the Middle East due to the war.

<div class="phx-topic">Indian and Chinese regulatory authorities are warning container lines against price gouging via surcharges tied to the war in the Middle East as ocean carriers levy additional fees in the thousands of dollars. China’s Ministry of Transport (MOT) <a href="https://xxgk.mot.gov.cn/jigou/syj/202603/t20260309_4201600.html">said in a Tuesday statement</a> that it has spoken to representatives of Maersk and Mediterranean Shipping Co. “regarding international shipping operations.” The ministry expressed concerns about the suspension of service from China to the Middle East, along with additional charges and higher rates being sought by carriers, two people familiar with the matter <a href="https://www.ft.com/content/2a6299a3-c25d-4b05-8f4b-9f745173cb1a">told The Financial Times</a>. Due to the war in the Middle East, the Gemini Cooperation of Maersk and Hapag-Lloyd is suspending some Middle East services, including those to Europe and Asia as well as regional shuttles. The alliance is also adding a new Asia-Europe loop that would partially replace the suspended east-west services. Carriers have defended the rate increases for shipments out of Asia and elsewhere, citing the higher cost of operating given that port congestion in the Middle East has tied up 2% of total container tonnage and <a href="https://www.joc.com/article/waves-of-diverted-containers-swamping-middle-east-ports-6183989">more than 200,000 TEUs of equipment are trapped</a> in the Persian Gulf. Maersk, for example, has imposed a $200-per-TEU surcharge for shipments from Asia to the Dar es Salaam, Tanzania, while surcharges from other lanes have been upward of $2,400 per TEU for shipments out of some parts of India. MSC on Tuesday announced it was seeking higher rates for shipments from the Far East to Europe, the Mediterranean and North Africa. Effective March 29, MSC, the largest container line by fleet tonnage, is setting freight-all-kinds (FAK) rates from Asia to North Europe at $2,820 per TEU. In October, MSC set FAK rates for the same trade at $1,620 per TEU. Maersk’s APM Terminals and MSC subsidiary Terminal Investments Limited took over the temporary operation of Panama’s Balboa and Christobal ports after Panama Ports Company, a subsidiary of Hoing Kong-listed subsidiary CK Hutchison Holdings had its 28-year concession nullified by Panama’s Supreme Court. <a href="https://www.joc.com/article/hutchison-seeks-2-billion-in-damages-from-panama-after-terminal-deal-canceled-6183273">China has been highly critical</a> of Panama's decision and has previously warned of severe consequences following the action. <h3>Protecting Indian interests </h3>Separately, Indian regulators on Tuesday warned ocean carriers not to engage in “predatory pricing” to the detriment of Indian importers and exporters. The Directorate General of Shipping specifically stressed the need to ensure transparency in freight charges to avoid potential disputes, adding that exporters and importers must know their logistics costs up front. The regulatory intervention follows complaints from shipper groups about carriers levying war risk surcharges, sometimes retroactively, in the range of $2,000 per TEU and $3,000 per FEU for dry boxes and up to $4,000 per refrigerated container. Sunil Vaswani, executive director of the CSLA, said carriers serving the India-Middle East trade imposed the surcharges to offset additional operating costs driven by the sudden closure of the Strait of Hormuz. “Despite the challenges, container lines are making every effort to assist the trade,” Vaswani explained. The subject of carrier surcharges and ancillary fees in container supply chains has been contentious for decades. And foreign carriers that typically enjoy a capacity fiefdom in the market <a href="https://www.joc.com/article/indias-surcharge-review-threatens-to-squeeze-container-lines-5207313">had resisted previous efforts by Indian logistics policymakers</a> to create a regulated pricing environment, with terminal handling charges at the heart of that acrimonious debate. The warnings from regulators echo <a href="https://www.joc.com/article/chinese-shipping-regulators-flex-muscles-to-protect-exporters-5197047">similar statements made by China’s MOT in September 2020</a>, when a pandemic-driven surge of imports from Asia soaked up all available outbound vessel space and sent container spot rates soaring. At the time, the ministry urged carriers to add capacity to trans-Pacific routes and refrain from aggressive rate hikes. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a> and Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com</a>. </div>

Indian and Chinese regulatory authorities are warning container lines against price gouging via surcharges tied to the war in the Middle East as ocean carriers levy additional fees in the thousands of dollars. China’s Ministry of Transport (MOT) said in a Tuesday statement that it has spoken to representatives of Maersk and Mediterranean Shipping Co. “regarding international shipping operations.” The ministry expressed concerns about the suspension of service from China to the Middle East, along with additional charges and higher rates being sought by carriers, two people familiar with the matter told The Financial Times. Due to the war in the Middle East, the Gemini Cooperation of Maersk and Hapag-Lloyd is suspending some Middle East services, including those to Europe and Asia as well as regional shuttles. The alliance is also adding a new Asia-Europe loop that would partially replace the suspended east-west services. Carriers have defended the rate increases for shipments out of Asia and elsewhere, citing the higher cost of operating given that port congestion in the Middle East has tied up 2% of total container tonnage and more than 200,000 TEUs of equipment are trapped in the Persian Gulf. Maersk, for example, has imposed a $200-per-TEU surcharge for shipments from Asia to the Dar es Salaam, Tanzania, while surcharges from other lanes have been upward of $2,400 per TEU for shipments out of some parts of India. MSC on Tuesday announced it was seeking higher rates for shipments from the Far East to Europe, the Mediterranean and North Africa. Effective March 29, MSC, the largest container line by fleet tonnage, is setting freight-all-kinds (FAK) rates from Asia to North Europe at $2,820 per TEU. In October, MSC set FAK rates for the same trade at $1,620 per TEU. Maersk’s APM Terminals and MSC subsidiary Terminal Investments Limited took over the temporary operation of Panama’s Balboa and Christobal ports after Panama Ports Company, a subsidiary of Hoing Kong-listed subsidiary CK Hutchison Holdings had its 28-year concession nullified by Panama’s Supreme Court. China has been highly critical of Panama's decision and has previously warned of severe consequences following the action. Protecting Indian interests Separately, Indian regulators on Tuesday warned ocean carriers not to engage in “predatory pricing” to the detriment of Indian importers and exporters. The Directorate General of Shipping specifically stressed the need to ensure transparency in freight charges to avoid potential disputes, adding that exporters and importers must know their logistics costs up front. The regulatory intervention follows complaints from shipper groups about carriers levying war risk surcharges, sometimes retroactively, in the range of $2,000 per TEU and $3,000 per FEU for dry boxes and up to $4,000 per refrigerated container. Sunil Vaswani, executive director of the CSLA, said carriers serving the India-Middle East trade imposed the surcharges to offset additional operating costs driven by the sudden closure of the Strait of Hormuz. “Despite the challenges, container lines are making every effort to assist the trade,” Vaswani explained. The subject of carrier surcharges and ancillary fees in container supply chains has been contentious for decades. And foreign carriers that typically enjoy a capacity fiefdom in the market had resisted previous efforts by Indian logistics policymakers to create a regulated pricing environment, with terminal handling charges at the heart of that acrimonious debate. The warnings from regulators echo similar statements made by China’s MOT in September 2020 , when a pandemic-driven surge of imports from Asia soaked up all available outbound vessel space and sent container spot rates soaring. At the time, the ministry urged carriers to add capacity to trans-Pacific routes and refrain from aggressive rate hikes. Contact Mark Szakonyi at mark.szakonyi@spglobal.com and Bency Mathew at  bencyvmathew@gmail.com .

Container Shipping News

China, India warn carriers on higher pricing tied to Middle East conflict

<div class="phx-topic abstract-wrapper">Port stakeholders in Los Angeles acknowledge that redecking the Vincent Thomas Bridge will impact traffic over the next two years, but they say longer truck gates and a real-time communication system will minimize disruptions.</div>

Port stakeholders in Los Angeles acknowledge that redecking the Vincent Thomas Bridge will impact traffic over the next two years, but they say longer truck gates and a real-time communication system will minimize disruptions.

<div class="phx-topic">Long Beach, California — Port and marine terminal executives say they have a plan to minimize disruption during the two-year redecking of a key bridge at the entry of the Los Angeles harbor that includes keeping truck gates open longer and on weekends. The California Department of Transportation (Caltrans) <a href="https://www.joc.com/article/redecking-project-on-los-angeles-harbor-bridge-to-begin-in-early-2026-6105309">will close the 63-year-old Vincent Thomas Bridge</a>, which handles about 53,000 vehicles a day, including 3,400 heavy-duty trucks, in one direction from March 23 to Nov. 1, followed by a complete closure through November 2028. “I’ll be very clear on this one: we will do what it takes to keep the trucks moving,” Alan McCorkle, president and CEO of Yusen Terminals in Los Angeles, said during the Journal of Commerce’s TPM26 conference last week. In addition to extra truck gates, port stakeholders in Los Angeles have been working with Caltrans for two years <a href="https://www.joc.com/article/la-port-stakeholders-warming-to-plan-to-mitigate-impact-of-bridge-project-6013847">to develop and improve a detour route</a> of surface streets that connect with major Southern California freeways. Local police agencies will provide continuous traffic control to respond to accidents and other events that disrupt traffic flow. A system of more than 40 Caltrans cameras — and more than 700 cameras throughout the ports’ six container terminals — will provide real-time information on traffic conditions, enabling terminal operators to respond immediately to delays, according to Port of Los Angeles Executive Director Gene Seroka. “We know that one trucker who has a problem — is delayed, misses an appointment — is a problem,” Seroka said. With 6,000 to 8,000 trucks operating in the harbor every day, an open line of communication among Caltrans, terminals and truckers will be crucial to ensuring minor disruptions don’t turn into prolonged congestion, said Matt Schrap, chief commercial officer of Forum Mobility and former CEO of the Harbor Trucking Association (HTA). “I don’t think there’s anyone in our industry who really knows exactly what’s going to happen, but we’re going to react appropriately,” Schrap told TPM26. The HTA must now impress upon ocean carriers the need for additional free time for container storage at the terminals if traffic disruptions related to the $1.5 billion redecking project delay pickups, he added. In the meantime, the port will continue to push its proposal to construct a new, taller bridge that would allow super-post Panamax vessels to call the Yusen Terminals, TraPac and West Basin terminals, Seroka said. “I want to make sure the 40% of our port’s capacity north of the bridge doesn’t go into obsolescence,” Seroka said. If the project moves forward, Caltrans will “help support it as much as we can,” Osama Megalla, assistant division chief-program/project manager and principal engineer for Caltrans District 7, said during the conference. “We’ll provide our expertise and oversight to make sure that the consultants are doing what they’re supposed to do, and construction is going well,” he said. Contact Bill Mongelluzzo at <a href="mailto: bill.mongelluzzo@spglobal.com">bill.mongelluzzo@spglobal.com</a>. </div>

Long Beach, California — Port and marine terminal executives say they have a plan to minimize disruption during the two-year redecking of a key bridge at the entry of the Los Angeles harbor that includes keeping truck gates open longer and on weekends. The California Department of Transportation (Caltrans) will close the 63-year-old Vincent Thomas Bridge , which handles about 53,000 vehicles a day, including 3,400 heavy-duty trucks, in one direction from March 23 to Nov. 1, followed by a complete closure through November 2028. “I’ll be very clear on this one: we will do what it takes to keep the trucks moving,” Alan McCorkle, president and CEO of Yusen Terminals in Los Angeles, said during the Journal of Commerce’s TPM26 conference last week. In addition to extra truck gates, port stakeholders in Los Angeles have been working with Caltrans for two years to develop and improve a detour route of surface streets that connect with major Southern California freeways. Local police agencies will provide continuous traffic control to respond to accidents and other events that disrupt traffic flow. A system of more than 40 Caltrans cameras — and more than 700 cameras throughout the ports’ six container terminals — will provide real-time information on traffic conditions, enabling terminal operators to respond immediately to delays, according to Port of Los Angeles Executive Director Gene Seroka. “We know that one trucker who has a problem — is delayed, misses an appointment — is a problem,” Seroka said. With 6,000 to 8,000 trucks operating in the harbor every day, an open line of communication among Caltrans, terminals and truckers will be crucial to ensuring minor disruptions don’t turn into prolonged congestion, said Matt Schrap, chief commercial officer of Forum Mobility and former CEO of the Harbor Trucking Association (HTA). “I don’t think there’s anyone in our industry who really knows exactly what’s going to happen, but we’re going to react appropriately,” Schrap told TPM26. The HTA must now impress upon ocean carriers the need for additional free time for container storage at the terminals if traffic disruptions related to the $1.5 billion redecking project delay pickups, he added. In the meantime, the port will continue to push its proposal to construct a new, taller bridge that would allow super-post Panamax vessels to call the Yusen Terminals, TraPac and West Basin terminals, Seroka said. “I want to make sure the 40% of our port’s capacity north of the bridge doesn’t go into obsolescence,” Seroka said. If the project moves forward, Caltrans will “help support it as much as we can,” Osama Megalla, assistant division chief-program/project manager and principal engineer for Caltrans District 7, said during the conference. “We’ll provide our expertise and oversight to make sure that the consultants are doing what they’re supposed to do, and construction is going well,” he said. Contact Bill Mongelluzzo at  bill.mongelluzzo@spglobal.com .

Trans-Pacific

Port infrastructure

North American ports

LA terminals to extend gates to mitigate disruption during bridge closure

<div class="phx-topic abstract-wrapper">A proposed universal tax on foreign-built ships would strain trade relations, raise the cost of doing business and stoke inflation, writes Reason Foundation policy analyst Jay Derr. </div>

A proposed universal tax on foreign-built ships would strain trade relations, raise the cost of doing business and stoke inflation, writes Reason Foundation policy analyst Jay Derr.

<div class="phx-topic">A new proposal from the Trump administration would impose a universal fee on foreign-built vessels entering US ports, adding another layer of cost to international trade at a time when the supply chain is already fragile. Yet the United States already imposes the Harbor Maintenance Tax (HMT) on incoming vessels, regardless of where they are built. This double taxation would harm already-strained relations with our trading partners by raising the cost of doing business in the country. Everyday Americans would ultimately bear these additional costs in the form of higher-priced goods. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6183829_0.1.png"></img></div>This idea is a perversion of a tonnage fee, initially proposed by the Clinton administration in 1999 as a remedy for longstanding problems with the HMT. But the Trump administration proposal does not aim to fix the problems with the HMT. Rather, the problems with the proposed universal fee on foreign vessels mirror those associated with the HMT. The HMT, when first implemented, was an ad valorem tax levied on all vessels, regardless of whether they were importing or exporting goods into the United States. However, the US Constitution flatly states that exports cannot be taxed in Article I, Section 9, Clause 5. As such, the Supreme Court ruled that the HMT could not be applied to exports. This shifted the financial burden for America’s port and navigability projects squarely onto importers’ shoulders. However, the Supreme Court did not rule out the implementation of a user fee, which is distinct from a tax. The test of a user fee was outlined in another Supreme Court case, Evansville Airport v. Delta Airlines. For a levied fee to be considered a user fee rather than a tax, it must pass what is now called the Evansville Test: it must not discriminate against interstate commerce, must be based on a fair approximation of use and must not be excessive. Congress never passed legislation to convert the harbor maintenance tax into a user fee, so the HMT remains an ad valorem tax that cannot be levied on exporters, giving exporters cheaper access to US port infrastructure compared with importers. The Trump administration says of its proposed universal tax: “As foreign-built vessels benefit from US market access, this policy ensures that they contribute to the long-term revitalization of America’s maritime capabilities.” This isn’t wrong in principle. Those who benefit from infrastructure ought to contribute to its maintenance. But those foreign vessels targeted by the administration’s fee already help fund maritime infrastructure through their HMT payments. Instead of this double taxation, the Trump administration should reform the HMT, which could be changed to a harbor maintenance fee. The new fee should be based on tonnage, not on whether the freight is on- or off-loaded, and be applied to the net or gross tonnage of the vessel, depending on the type of vessel. The weight of the cargo being moved on and off a ship has no bearing on the maintenance needs of the harbor itself, but the tonnage and capacity of the ship do. Net and gross tonnage serve as better proxies for the actual costs of services rendered during a port call and account for the vessel’s draft and the dredging depth required. These changes alone would allow a proposed harbor maintenance fee to pass the Evansville Test and satisfy the legal requirements for a fee. If enacted, exporters would once again pay to support the infrastructure they use, regardless of the vessel’s country of origin. The upcoming biennial Water Resources Development Act offers Congress an opportunity to reform the existing HMT into a proper user fee levied on both exports and imports. The best step to improve American maritime infrastructure is to modernize and reform the existing HMT, not to layer more poorly targeted taxes on top of it. Congress and the Trump administration should pursue solutions that expand maritime capacity without raising the cost of moving goods through American ports. Jay Derr is a transportation policy analyst at the Reason Foundation and author of the report, “Navigating port funding: Alternatives for reforming the Harbor Maintenance Trust Fund.” Contact him at <a href="mailto:jay.derr@reason.org">jay.derr@reason.org</a>. </div>

A new proposal from the Trump administration would impose a universal fee on foreign-built vessels entering US ports, adding another layer of cost to international trade at a time when the supply chain is already fragile. Yet the United States already imposes the Harbor Maintenance Tax (HMT) on incoming vessels, regardless of where they are built. This double taxation would harm already-strained relations with our trading partners by raising the cost of doing business in the country. Everyday Americans would ultimately bear these additional costs in the form of higher-priced goods. This idea is a perversion of a tonnage fee, initially proposed by the Clinton administration in 1999 as a remedy for longstanding problems with the HMT. But the Trump administration proposal does not aim to fix the problems with the HMT. Rather, the problems with the proposed universal fee on foreign vessels mirror those associated with the HMT. The HMT, when first implemented, was an ad valorem tax levied on all vessels, regardless of whether they were importing or exporting goods into the United States. However, the US Constitution flatly states that exports cannot be taxed in Article I, Section 9, Clause 5. As such, the Supreme Court ruled that the HMT could not be applied to exports. This shifted the financial burden for America’s port and navigability projects squarely onto importers’ shoulders. However, the Supreme Court did not rule out the implementation of a user fee, which is distinct from a tax. The test of a user fee was outlined in another Supreme Court case, Evansville Airport v. Delta Airlines. For a levied fee to be considered a user fee rather than a tax, it must pass what is now called the Evansville Test: it must not discriminate against interstate commerce, must be based on a fair approximation of use and must not be excessive. Congress never passed legislation to convert the harbor maintenance tax into a user fee, so the HMT remains an ad valorem tax that cannot be levied on exporters, giving exporters cheaper access to US port infrastructure compared with importers. The Trump administration says of its proposed universal tax: “As foreign-built vessels benefit from US market access, this policy ensures that they contribute to the long-term revitalization of America’s maritime capabilities.” This isn’t wrong in principle. Those who benefit from infrastructure ought to contribute to its maintenance. But those foreign vessels targeted by the administration’s fee already help fund maritime infrastructure through their HMT payments. Instead of this double taxation, the Trump administration should reform the HMT, which could be changed to a harbor maintenance fee. The new fee should be based on tonnage, not on whether the freight is on- or off-loaded, and be applied to the net or gross tonnage of the vessel, depending on the type of vessel. The weight of the cargo being moved on and off a ship has no bearing on the maintenance needs of the harbor itself, but the tonnage and capacity of the ship do. Net and gross tonnage serve as better proxies for the actual costs of services rendered during a port call and account for the vessel’s draft and the dredging depth required. These changes alone would allow a proposed harbor maintenance fee to pass the Evansville Test and satisfy the legal requirements for a fee. If enacted, exporters would once again pay to support the infrastructure they use, regardless of the vessel’s country of origin. The upcoming biennial Water Resources Development Act offers Congress an opportunity to reform the existing HMT into a proper user fee levied on both exports and imports. The best step to improve American maritime infrastructure is to modernize and reform the existing HMT, not to layer more poorly targeted taxes on top of it. Congress and the Trump administration should pursue solutions that expand maritime capacity without raising the cost of moving goods through American ports. Jay Derr is a transportation policy analyst at the Reason Foundation and author of the report, “Navigating port funding: Alternatives for reforming the Harbor Maintenance Trust Fund.” Contact him at jay.derr@reason.org .

Transport, Trade and Regulation News

Reform HMT rather than taxing shipping more: analyst

<div class="phx-topic abstract-wrapper">The port’s Cast and Racine terminals remained open to vessels during the five-month strike by clerical staff, which began last September.</div>

The port’s Cast and Racine terminals remained open to vessels during the five-month strike by clerical staff, which began last September.

<div class="phx-topic">Montreal Gateway Terminals (MGT) has signed a new collective bargaining agreement with its unionized clerical workers, ending a five-month strike at the port’s largest terminal operator. MGT on Monday confirmed in a statement to the Journal of Commerce that it signed a new contract with Local 4317 of the Canadian Union of Public Employees (CUPE), without offering further details about the agreement. CUPE could not be reached for comment. Last September, 32 transportation agents from Local 4317 filed a strike notice with MGT, which owns the Cast and Racine terminals. The previous four-year contract with the local expired at the end of 2024. An update from Kuehne + Nagel said the new contract would cover a term of eight years and that a “smooth transition to regular operations, including the gradual reinstatement of standard 17-hour truck gate service,” was expected. CUPE last year said Local 4317 went on strike after mediation and conciliation talks had failed. A source familiar with the matter said the clerical jobs were handled by management during the strike, which allowed vessel operations to continue. CUPE said in a statement last year that the union and MGT failed to come to terms on “minimum operating requirements” under a new contract. The previous collective bargaining agreement called for MGT to have a certain number of transportation agents at the terminals, even during holidays and weekends and even if no vessel operations occurred. It was not clear what staffing levels MGT will be required to maintain under the new contract. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Montreal Gateway Terminals (MGT) has signed a new collective bargaining agreement with its unionized clerical workers, ending a five-month strike at the port’s largest terminal operator. MGT on Monday confirmed in a statement to the Journal of Commerce that it signed a new contract with Local 4317 of the Canadian Union of Public Employees (CUPE), without offering further details about the agreement. CUPE could not be reached for comment. Last September, 32 transportation agents from Local 4317 filed a strike notice with MGT, which owns the Cast and Racine terminals. The previous four-year contract with the local expired at the end of 2024. An update from Kuehne + Nagel said the new contract would cover a term of eight years and that a “smooth transition to regular operations, including the gradual reinstatement of standard 17-hour truck gate service,” was expected. CUPE last year said Local 4317 went on strike after mediation and conciliation talks had failed. A source familiar with the matter said the clerical jobs were handled by management during the strike, which allowed vessel operations to continue. CUPE said in a statement last year that the union and MGT failed to come to terms on “minimum operating requirements” under a new contract. The previous collective bargaining agreement called for MGT to have a certain number of transportation agents at the terminals, even during holidays and weekends and even if no vessel operations occurred. It was not clear what staffing levels MGT will be required to maintain under the new contract. Contact Michael Angell at michael.angell@spglobal.com .

Longshore labor

Montreal terminal operator signs deal with striking office workers

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