<div class="phx-topic abstract-wrapper">The service efficiency of the port can be reflected by the time cost of the ship in port.</div>

The service efficiency of the port can be reflected by the time cost of the ship in port.

<div>Efficiency Evaluation of Global 20 Major Container Ports Based on AIS DataAs the port customer, the shipping company would like to judge the service quality of a port in two aspects: time and cost, and even will be more sensitive to time requirements. The service efficiency of the port can be reflected by the time cost of the ship in port. In general, the services provided by the port for ships can be divided into two categories: berth loading and unloading services and ancillary services. Therefore, this paper focus on the efficiency analysis of berth loading and unloading services and...

Efficiency Evaluation of Global 20 Major Container Ports Based on AIS Data As the port customer, the shipping company would like to judge the service quality of a port in two aspects: time and cost, and even will be more sensitive to time requirements. The service efficiency of the port can be reflected by the time cost of the ship in port. In general, the services provided by the port for ships can be divided into two categories: berth loading and unloading services and ancillary services. Therefore, this paper focus on the efficiency analysis of berth loading and unloading services and also the ancillary services. This paper selects the container ports ranking high in terms of container throughput as the research objects. The original data is collected from the ships engaged in international route from January to December 2017. 1. Berth Loading and Unloading Time Cost Analysis (1) The berth loading and unloading time cost of arrival ships in each port is very close. The berth loading and unloading time cost of ship is relative with the amount of containers that the ship handled in a port. However, it is meaningful to compare the loading and unloading time cost of similar type ships for the ports with same throughput scale. According to the research, it can be found that the port in the same throughput scale has similar performance in terms of berth loading and unloading time. For example, for a ship of 0-4,000 TEU, the berth loading and unloading time is about 8-15 hours, and for a 4,000-8,000TEU ship, it is usually about 10-16 hours. The efficiency of loading and unloading operations is closely related to the number of shore bridges and operating systems of port. And with the development of technology, the technical differences in global major container ports are tiny, so there is no significant difference in berth loading and unloading efficiency. (2) The berth loading and unloading time of American ports is higher than that of others. Among the 20 major container ports in the world, the berth loading and unloading efficiency of American ports is significantly lower than that of other ports. For example, for a container ship of 0-4,000 TEU, the berth loading and unloading time of several ports in the United States is almost three times than that of the most efficient port. And a ship on or above 8,000 TEU needs stay in berths for up to 7 days. Although compared with Chinese ports, US ports have relatively high loading and unloading capacity for a single large ship, but the difference between the scale and time is not proportional. (3)China's major container ports has higher loading and unloading efficiency. On the contrast, the loading and unloading efficiency of the main container ports in China is generally high, and the operation of container ports in other regions is relatively backward. On one hand, China's container ports above designated size are densely distributed, which divert the volume of container ships, resulting in a relatively short loading and unloading time for single ships at berth. On the other hand, technology and operation level of Chinese ports are indeed leading the world, and the short berth loading and unloading time cost is a relatively favorable proof. (4) The longer time for ships in Singapore Port is due to its comprehensive service supply. Compared with other international container hubs such as Hong Kong Port and Shanghai Port, the loading and unloading time for ships in Singapore Port is relatively long. The main reason is that Singapore Port is an international supply port, which can provide other services, including ship supply and maintenance after the ship is docked. According to statistics, after arrival in Singapore Port, 36.2% vessels carried out refueling and loading and unloading services at the same time, 4.5 percent of vessels carried out cargo handling and material supply, 10.8% of the vessels carried out the above three services, while just 32.8% vessels only for cargo handling. 2. Port Auxiliary Service Time Cost Analysis Port auxiliary services include towing, pilotage, mooring, port inspection, etc. Therefore, by processing AIS data, the time statistics of ships from entering the port to leaving the port with the loading and unloading time eliminating are collected. (1) Small ships operations often require more mooring time. It can be found that container ships below 4,000 TEU generally require longer non-berthing auxiliary service time than other types’ ship. The global major container hub ports often take precedence over the calling of large ships. Therefore, the time cost of small vessels in port is often affected under the limitation of berth. (2) Auxiliary service time is longer for the ports at the junction of rivers and seas Port of Rotterdam, Hamburg, Antwerp, and Guangzhou have longer auxiliary service time for each type of ship than other ports. The reason is that the distribution of the berths is dumbbell-shaped, except for the berths at outermost seaside piers, some berths are located in the places where the ships need longer time to pass through. And the service such as towing and pilotage often need a long time for ships. The ports located in the inland rivers are often berthed by small vessels below 4,000 TEU due to water depth restrictions. (3) American Ports performed more efficiency in port auxiliary services. Although the loading and unloading time is longer for the ships operated in the ports of United State, the auxiliary service time is shorter and the relative efficiency is higher than that of others. For example, the Port of New York & New Jersey, and the Port of Los Angeles ranked in the top ten by auxiliary operation time, and even ranked top five under special ship type among the global 20 major ports. 3. Arrival Vessels’ Structure Analysis of Global 20 Major Container Ports Click to enlarge (1) Singapore Port is the busiest port in the world. Judging from the scale of arrival ships, these 20 ports can be divided into three echelons. The first echelon, represented by Singapore Port, Shanghai Port, Shenzhen Port, Hong Kong Port, Busan Port and Ningbo Port, can reach more than 10,000 of container vessels in 2017. Rotterdam Port, Kaohsiung Port, Qingdao Port and Xiamen Port form the second echelon with the number of ship arrival between 5,000 and 10,000 ships. Antwerp Port, Tianjin Port, Guangzhou Port, Dubai Port, Tanjung Pelepas Port, Hamburg Port, Dalian Port, Port of New York and New Jersey, Port of Los Angeles, and Port of Long Beach are the third echelon, with less than 5,000 ship arrival in 2017. Among those ports, Singapore Port is undoubtedly the busiest port in terms of the number of arrival ships. (2) Shenzhen Port, Shanghai Port, Singapore Port, and Ningbo Port are the typical handling ports for very-large ships. According to the analysis of statistical data, the very-large vessels on or above 12,000 TEU are mainly engaged in the Asia-Europe route. For the number of arrival ships on or above 12,000 TEU, each of Shenzhen Port, Shanghai Port, Singapore Port and Ningbo Port has more than 1,000 callings in 2017. Shenzhen unexpectedly became the most popular port to call for the ships on or above 12,000 TEU. Furthermore, in East Asia, and the container ships on or above 18,000 TEU can only be handled in Shenzhen Port, Shanghai Port, Ningbo Port and Hong Kong Port.

Port News

Evaluating efficiency of top global container ports

<div class="phx-topic abstract-wrapper">Stocks that were already in the fuel supply chain and en route to refueling hubs when the Middle East conflict started have now been delivered, and those ports are running down their inventories.</div>

Stocks that were already in the fuel supply chain and en route to refueling hubs when the Middle East conflict started have now been delivered, and those ports are running down their inventories.

Feature image

<div class="phx-topic">The availability of bunker fuel in Asia for ocean carriers is manageable for now but beginning to tighten, and global suppliers warn that shortages will be felt around the world should the Strait of Hormuz remain closed to ship traffic for much longer. Meanwhile, carriers are deploying a range of strategic operational and financial measures to mitigate the potential fuel shortages and the rising prices that will result. These include slow steaming to conserve fuel, filling ships in the US and Europe and transferring bunkers to Asia, and levying emergency fuel surcharges to recover rising costs. The implications of widening fuel shortages on container shipping operations could be profound, according to Erik Deventak, chief technology and data officer at rate benchmarking platform Xeneta. ”In a worst-case scenario, any bunker shortage will hit supply because a carrier cannot run as many ships,” he said. “There’s no way around it and carriers will eventually need to reduce supply, likely through blank sailings.” While Deventak added a caveat — “realistically, no one is fully aware of what the scale of the bunker shortages could be” — he said the carriers would need to be selective on which services they were prepared to operate and which would be suspended. Hapag-Lloyd spokesperson Tim Seifert said the impact on the carrier’s operations so far was “limited and manageable,” but that Hapag was taking contingency measures to mitigate potential shortfalls. “We are taking on more fuel in ports where we would normally buy less to keep stock levels high,” he said. “As a fallback, we are considering bunker-only calls, but this has not been necessary so far.” About one-fifth of the world’s crude oil and refined products — 20 million barrels per day — is exported via the Strait of Hormuz, but that slowed to a trickle after the US and Israel began air strikes on Iran on Feb. 28. Export volumes of crude and refined products exiting the strait are currently at less than 10% of pre-war levels, forcing fuel suppliers across the region to reduce or shut down production. Bunker stocks that were already in the fuel supply chain and en route to refueling hubs when the war started have now been delivered, and those ports are running down their inventories. With Hormuz essentially unavailable to commercial shipping, there is no replenishment inbound. “If the Strait of Hormuz were to remain inaccessible, we would expect the market to tighten further – not only across Asia, but also into Europe and potentially parts of Africa,” Mikkel Kannegaard, head of global supply at Bunker Holding Group, the world’s largest bunker fuel supplier and trader, told the Journal of Commerce. “In Asia, availability remains acceptable so far, although supply uncertainty and backwardation are pushing up the delivery premiums,” he added. “At this stage, supply in Singapore and China appears to be holding up and looks manageable into April.” Backwardation is a market structure in which the spot price of a commodity is higher than its futures price, which can be a sign of supply disruptions. <h3>Emergency reserves inbound </h3>To address disruptions to oil markets stemming from the war in the Middle East, the 32 member countries of the International Energy Agency (IEA) on March 11 agreed to make 400 million barrels of oil from their emergency reserves available to the market. While the market has welcomed the measure, the fuel-strapped markets in Asia will not see the emergency reserves for at least two months, according to Sebastiaan Kosman, founder of bunker fuel analytics firm Spotbarge. “Even if you ship the oil now from the Amsterdam, Rotterdam, Antwerp area [known as ARA] to Asia, it will take two months to get the product loaded, shipped and refined,” Kosman said. Container shipping uses a range of different fuels, predominantly very low sulfur fuel oil (VLSFO), high sulfur fuel oil (HSFO) and low-sulfur marine gasoil (MGO). Liquefied natural gas (LNG) demand is increasing as more dual-fuel ships hit the water, but its usage depends on its price differential compared to conventional fuels, particularly MGO. Bunker fuel prices soared when the war began but have fallen over the past few days. The March 24 prices from Singapore assessed by industry platform Ship &amp; Bunker show VLSFO up 71% since late February at $894 per metric ton, but down 10% since the start of the week. MGO is up 151% at $1,784/mt, but has fallen 8% this week. The largest pricing decline was from HSFO. After rising 146% since the end of February to a high of $1,073/mt on March 9, the heavy fuel dropped steadily to $712/mt by March 24. Rotterdam fuel prices have also fallen this week and are substantially lower than Singapore. As of March 24, VLSFO was at $757/mt, up 54% compared to Feb. 27; MGO at $1,334/mt was almost double the pre-conflict level, and HSFO was up 63% at $714/mt, according to Ship&amp; Bunker. Kosman said Singapore’s crude oil comes from the Middle East and the supply chain disruption was widening the bunker fuel price differential between Singapore and Rotterdam. ”That already gives you indication that Singapore is really tight,” he noted. “If Hormuz remains closed in the long term, bunkers in Singapore, Korea or Japan will be empty way earlier than terminals in Antwerp and Rotterdam.” <h3>Offsetting fuel price impact </h3>To recover bunker costs that comprise half their operating expenses, <a href="https://www.joc.com/article/war-reignites-tussle-between-ocean-carriers-cargo-owners-over-fuel-surcharges-6188632">carriers have rolled out emergency fuel surcharges</a> on top of the quarterly bunker adjustment factors (BAFs) that were no match for fuel prices that doubled in two weeks. Analysts at investment bank Jefferies said in a note to customers this week that rates would need to strengthen by 15% to fully offset the impact of rising fuel prices, which would be challenging given the <a href="https://www.joc.com/article/scrapping-strategy-looms-large-in-2026-as-carriers-manage-growing-oversupply-6168918">excess capacity in the market.</a>On Monday, the US Federal Maritime Commission <a href="https://www.joc.com/article/fmc-rejects-requests-by-carriers-to-waive-waiting-period-for-middle-east-surcharges-6191881">unanimously rejected separate requests from four ocean carriers</a> to waive a 30-day notice period to implement surcharges tied to the war in the Middle East, forcing the four to wait until early April to charge their shipper customers. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="ef167537-108b-4e1b-ac11-43e99f815839"></dynamic-object></div>Meanwhile, spot rates on the Asia outbound trade lanes rose through March but have softened on Asia-Europe and flattened or even fallen on some trans-Pacific routes, according to the various pricing indices tracked by the Journal of Commerce. Asia-North Europe rates this week are 41% above their pre-war levels at $2,800 per FEU while Asia-Mediterranean rates are up 34% at $3,800/FEU, according to Platts, a sister company of the Journal of Commerce within S&amp;P Global. However, prices on both trade lanes softened in the past week. Although rates from Asia to the US West and East coasts rose in the first week of the war, they have since fallen below Feb. 28 levels. Deventak said although the rising price of fuel will drive up the price of shipping in the short term, he noted that the underlying market fundamentals remained in place — an oversupply of vessel capacity and demand that has been softened by a weak global economy. “We have seen the initial shock to container shipping, but the ultimate supply and demand structure has not massively changed since the conflict escalated, and it is this supply-demand balance that carries most weight in driving freight rates rather than carriers’ costs,” he said. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com.</a></div>

The availability of bunker fuel in Asia for ocean carriers is manageable for now but beginning to tighten, and global suppliers warn that shortages will be felt around the world should the Strait of Hormuz remain closed to ship traffic for much longer. Meanwhile, carriers are deploying a range of strategic operational and financial measures to mitigate the potential fuel shortages and the rising prices that will result. These include slow steaming to conserve fuel, filling ships in the US and Europe and transferring bunkers to Asia, and levying emergency fuel surcharges to recover rising costs. The implications of widening fuel shortages on container shipping operations could be profound, according to Erik Deventak, chief technology and data officer at rate benchmarking platform Xeneta. ”In a worst-case scenario, any bunker shortage will hit supply because a carrier cannot run as many ships,” he said. “There’s no way around it and carriers will eventually need to reduce supply, likely through blank sailings.” While Deventak added a caveat — “realistically, no one is fully aware of what the scale of the bunker shortages could be” — he said the carriers would need to be selective on which services they were prepared to operate and which would be suspended. Hapag-Lloyd spokesperson Tim Seifert said the impact on the carrier’s operations so far was “limited and manageable,” but that Hapag was taking contingency measures to mitigate potential shortfalls. “We are taking on more fuel in ports where we would normally buy less to keep stock levels high,” he said. “As a fallback, we are considering bunker-only calls, but this has not been necessary so far.” About one-fifth of the world’s crude oil and refined products — 20 million barrels per day — is exported via the Strait of Hormuz, but that slowed to a trickle after the US and Israel began air strikes on Iran on Feb. 28. Export volumes of crude and refined products exiting the strait are currently at less than 10% of pre-war levels, forcing fuel suppliers across the region to reduce or shut down production. Bunker stocks that were already in the fuel supply chain and en route to refueling hubs when the war started have now been delivered, and those ports are running down their inventories. With Hormuz essentially unavailable to commercial shipping, there is no replenishment inbound. “If the Strait of Hormuz were to remain inaccessible, we would expect the market to tighten further – not only across Asia, but also into Europe and potentially parts of Africa,” Mikkel Kannegaard, head of global supply at Bunker Holding Group, the world’s largest bunker fuel supplier and trader, told the Journal of Commerce. “In Asia, availability remains acceptable so far, although supply uncertainty and backwardation are pushing up the delivery premiums,” he added. “At this stage, supply in Singapore and China appears to be holding up and looks manageable into April.” Backwardation is a market structure in which the spot price of a commodity is higher than its futures price, which can be a sign of supply disruptions. Emergency reserves inbound To address disruptions to oil markets stemming from the war in the Middle East, the 32 member countries of the International Energy Agency (IEA) on March 11 agreed to make 400 million barrels of oil from their emergency reserves available to the market. While the market has welcomed the measure, the fuel-strapped markets in Asia will not see the emergency reserves for at least two months, according to Sebastiaan Kosman, founder of bunker fuel analytics firm Spotbarge. “Even if you ship the oil now from the Amsterdam, Rotterdam, Antwerp area [known as ARA] to Asia, it will take two months to get the product loaded, shipped and refined,” Kosman said. Container shipping uses a range of different fuels, predominantly very low sulfur fuel oil (VLSFO), high sulfur fuel oil (HSFO) and low-sulfur marine gasoil (MGO). Liquefied natural gas (LNG) demand is increasing as more dual-fuel ships hit the water, but its usage depends on its price differential compared to conventional fuels, particularly MGO. Bunker fuel prices soared when the war began but have fallen over the past few days. The March 24 prices from Singapore assessed by industry platform Ship & Bunker show VLSFO up 71% since late February at $894 per metric ton, but down 10% since the start of the week. MGO is up 151% at $1,784/mt, but has fallen 8% this week. The largest pricing decline was from HSFO. After rising 146% since the end of February to a high of $1,073/mt on March 9, the heavy fuel dropped steadily to $712/mt by March 24. Rotterdam fuel prices have also fallen this week and are substantially lower than Singapore. As of March 24, VLSFO was at $757/mt, up 54% compared to Feb. 27; MGO at $1,334/mt was almost double the pre-conflict level, and HSFO was up 63% at $714/mt, according to Ship& Bunker. Kosman said Singapore’s crude oil comes from the Middle East and the supply chain disruption was widening the bunker fuel price differential between Singapore and Rotterdam. ”That already gives you indication that Singapore is really tight,” he noted. “If Hormuz remains closed in the long term, bunkers in Singapore, Korea or Japan will be empty way earlier than terminals in Antwerp and Rotterdam.” Offsetting fuel price impact To recover bunker costs that comprise half their operating expenses, carriers have rolled out emergency fuel surcharges on top of the quarterly bunker adjustment factors (BAFs) that were no match for fuel prices that doubled in two weeks. Analysts at investment bank Jefferies said in a note to customers this week that rates would need to strengthen by 15% to fully offset the impact of rising fuel prices, which would be challenging given the excess capacity in the market. On Monday, the US Federal Maritime Commission unanimously rejected separate requests from four ocean carriers to waive a 30-day notice period to implement surcharges tied to the war in the Middle East, forcing the four to wait until early April to charge their shipper customers. Meanwhile, spot rates on the Asia outbound trade lanes rose through March but have softened on Asia-Europe and flattened or even fallen on some trans-Pacific routes, according to the various pricing indices tracked by the Journal of Commerce. Asia-North Europe rates this week are 41% above their pre-war levels at $2,800 per FEU while Asia-Mediterranean rates are up 34% at $3,800/FEU, according to Platts, a sister company of the Journal of Commerce within S&P Global. However, prices on both trade lanes softened in the past week. Although rates from Asia to the US West and East coasts rose in the first week of the war, they have since fallen below Feb. 28 levels. Deventak said although the rising price of fuel will drive up the price of shipping in the short term, he noted that the underlying market fundamentals remained in place — an oversupply of vessel capacity and demand that has been softened by a weak global economy. “We have seen the initial shock to container shipping, but the ultimate supply and demand structure has not massively changed since the conflict escalated, and it is this supply-demand balance that carries most weight in driving freight rates rather than carriers’ costs,” he said. Contact Greg Knowler at greg.knowler@spglobal.com.

Container lines

International ports

Container Shipping News

Maritime

Bunker fuel shortages in Asia at tipping point as war disruption continues

<div class="phx-topic abstract-wrapper">The American Trucking Associations February truck tonnage report showed a 2.6% month-over-month increase, making it the largest sequential gain in three years.</div>

The American Trucking Associations February truck tonnage report showed a 2.6% month-over-month increase, making it the largest sequential gain in three years.

<div class="phx-topic">Soaring diesel fuel prices and the nationwide crackdown by the federal government on non-domiciled commercial drivers is tightening truckload capacity in the US, putting a floor under rates. And new data showing that demand may be perking up has raised hopes in the trucking industry, albeit cautiously, that the freight recession going on four years could be nearing an end. Still, trucking executives say for any recovery to be long-term, demand needs to show steady and solid growth over several months. The American Trucking Associations (ATA) February truck tonnage report showed a 2.6% month-over-month increase, making it the largest sequential gain in three years, according to Bob Costello, the group’s chief economist. On a year-over-year basis, the increase was 2.1%. “February’s robust gain is great to see, but the size of the gain is likely magnified due to lower industry capacity,” Costello said in a statement. “Particularly after a very prolonged freight recession, improving volumes in any manner is welcomed.” Capacity, meanwhile, is being crimped by diesel prices that have rocketed higher since the war in the Middle East began Feb. 28, forcing many small and mid-size drivers to park their trucks given the fast-rising expense. The average price of on-highway diesel in the US jumped to almost $5.38 per gallon as of March 23, up 30 cents in one week and $1.80 higher than it was a year ago. Prices in California were at $6.87/gal. The sudden and steep increase in diesel is impacting capacity, according to Dean Croke, principal analyst for DAT Freight &amp; Analytics. “Diesel is up about $1.30 a gallon since the war started and that’s really crushed a lot of the small carriers because they’ve haven’t been able to get the full fuel surcharge built into the loads,” Croke said. “A lot of carriers are saying they’re going to sit this out until things stabilize.” The latest information on rates from DAT showed that for the week ending March 21, dry van spot rates were flat week-to-week at $1.92 per mile. Reefer spot rates increased to $2.32 per mile, up 2 cents, and flatbed spot rates moved 3 cents higher to $2.34 per mile. DAT said as fuel surcharges have increased 44% to 64 cents per mile, carriers are struggling to negotiate load-by-load rate increases that fully offset the higher prices for diesel. “Capacity is tightening. It is putting a floor on rates that we’ve not seen in many years,” Croke said. “I suspect as you get into the spring building, construction and nursery season volume bump, you’ll see rates start to move up again.” <h3>CDLs culled in California </h3>Adding to the tightening capacity is the <a href="https://www.joc.com/article/capacity-cuts-fuel-shocks-provide-openings-for-trucking-and-rail-6188739">US Department of Transportation’s crackdown</a> on non-domiciled CDLs while toughening standards around the English language proficiency of all drivers. The Federal Motor Carrier Safety Administration (FMCSA) has canceled an estimated 13,000 CDLs in California. Raman Dillon, president of the 2,000- member North American Punjabi Trucking Association, said the loss of those drivers and high diesel prices will continue to tighten capacity in the state. “The drivers are suffering and the impact on the public and the supply chain has yet to be seen,” Dillon told the Journal of Commerce. “These CDLs were not picked up at a convenience store, they were issued by the government. You cannot say that every one of the 13,000 drivers they took out is a bad driver... “We feel like we are being made scapegoats, but it will tighten capacity, because our industry has a shortage of good drivers,” he added. Dillon agreed with Croke that high diesel prices will push drivers to the sidelines, at least for the time being, tightening capacity and impacting shippers by making it more costly and harder to find dependable ways to more freight. “We have diesel in some places being sold for seven dollars or more a gallon, and that’s a surcharge that you and me, we’re going to pay,” he said. “Everything is going to get more expensive.” <a href="https://www.joc.com/article/house-committee-advances-bill-targeting-non-domiciled-commercial-drivers-licenses-6188801">Legislation making its way through Congress</a>, meanwhile, contains several provisions that go far beyond the scope of the FMCSA’s rule restricting non-domiciled CDLs, which the agency estimates could remove up to 194,000 drivers from the market over five years. Still, the trucking industry is <a href="https://www.joc.com/article/impact-of-non-domiciled-cdl-enforcement-splits-us-trucking-sector-6135184">split on whether the federal regulations will significantly impact trucking and drayage capacity</a> amid the more than four-year freight recession. Contact Dan Ronan at <a href="mailto:contactdanronan@gmail.com">contactdanronan@gmail.com.</a></div>

Soaring diesel fuel prices and the nationwide crackdown by the federal government on non-domiciled commercial drivers is tightening truckload capacity in the US, putting a floor under rates. And new data showing that demand may be perking up has raised hopes in the trucking industry, albeit cautiously, that the freight recession going on four years could be nearing an end. Still, trucking executives say for any recovery to be long-term, demand needs to show steady and solid growth over several months. The American Trucking Associations (ATA) February truck tonnage report showed a 2.6% month-over-month increase, making it the largest sequential gain in three years, according to Bob Costello, the group’s chief economist. On a year-over-year basis, the increase was 2.1%. “February’s robust gain is great to see, but the size of the gain is likely magnified due to lower industry capacity,” Costello said in a statement. “Particularly after a very prolonged freight recession, improving volumes in any manner is welcomed.” Capacity, meanwhile, is being crimped by diesel prices that have rocketed higher since the war in the Middle East began Feb. 28, forcing many small and mid-size drivers to park their trucks given the fast-rising expense. The average price of on-highway diesel in the US jumped to almost $5.38 per gallon as of March 23, up 30 cents in one week and $1.80 higher than it was a year ago. Prices in California were at $6.87/gal. The sudden and steep increase in diesel is impacting capacity, according to Dean Croke, principal analyst for DAT Freight & Analytics. “Diesel is up about $1.30 a gallon since the war started and that’s really crushed a lot of the small carriers because they’ve haven’t been able to get the full fuel surcharge built into the loads,” Croke said. “A lot of carriers are saying they’re going to sit this out until things stabilize.” The latest information on rates from DAT showed that for the week ending March 21, dry van spot rates were flat week-to-week at $1.92 per mile. Reefer spot rates increased to $2.32 per mile, up 2 cents, and flatbed spot rates moved 3 cents higher to $2.34 per mile. DAT said as fuel surcharges have increased 44% to 64 cents per mile, carriers are struggling to negotiate load-by-load rate increases that fully offset the higher prices for diesel. “Capacity is tightening. It is putting a floor on rates that we’ve not seen in many years,” Croke said. “I suspect as you get into the spring building, construction and nursery season volume bump, you’ll see rates start to move up again.” CDLs culled in California Adding to the tightening capacity is the US Department of Transportation’s crackdown on non-domiciled CDLs while toughening standards around the English language proficiency of all drivers. The Federal Motor Carrier Safety Administration (FMCSA) has canceled an estimated 13,000 CDLs in California. Raman Dillon, president of the 2,000- member North American Punjabi Trucking Association, said the loss of those drivers and high diesel prices will continue to tighten capacity in the state. “The drivers are suffering and the impact on the public and the supply chain has yet to be seen,” Dillon told the Journal of Commerce. “These CDLs were not picked up at a convenience store, they were issued by the government. You cannot say that every one of the 13,000 drivers they took out is a bad driver... “We feel like we are being made scapegoats, but it will tighten capacity, because our industry has a shortage of good drivers,” he added. Dillon agreed with Croke that high diesel prices will push drivers to the sidelines, at least for the time being, tightening capacity and impacting shippers by making it more costly and harder to find dependable ways to more freight. “We have diesel in some places being sold for seven dollars or more a gallon, and that’s a surcharge that you and me, we’re going to pay,” he said. “Everything is going to get more expensive.” Legislation making its way through Congress , meanwhile, contains several provisions that go far beyond the scope of the FMCSA’s rule restricting non-domiciled CDLs, which the agency estimates could remove up to 194,000 drivers from the market over five years. Still, the trucking industry is split on whether the federal regulations will significantly impact trucking and drayage capacity amid the more than four-year freight recession. Contact Dan Ronan at contactdanronan@gmail.com.

Trucking News

Truckload

Surface

Diesel shock puts floor under trucking rates as demand shows some life

<div class="phx-topic abstract-wrapper">TotalEnergies accepted a $1 billion payment from the Trump administration to walk away from two offshore wind projects and instead reinvest the funds in fossil fuel projects along the Gulf Coast.</div>

TotalEnergies accepted a $1 billion payment from the Trump administration to walk away from two offshore wind projects and instead reinvest the funds in fossil fuel projects along the Gulf Coast.

<div class="phx-topic">The cancellation of a pair of US offshore wind projects in exchange for a $1 billion payment from the Trump administration is the latest development to chip away at renewable project cargo opportunities. But the deal could potentially drive cargo for fossil fuel projects. French energy giant TotalEnergies signed off on a March 23 agreement to accept $1 billion from the US government to give up the leases on its two offshore wind projects — Carolina Long Bay and New York Bight — and instead pivot to the buildout of gas and power production and export facilities in the US. “Considering that the development of offshore wind projects is not in the country’s interest, we have decided to renounce offshore wind development in the United States in exchange for the reimbursement of the lease fees,” TotalEnergies chairman and CEO Patrick Pouyanné said in a statement. US offshore wind projects have come under attack by President Donald Trump, who issued an executive order banning new wind power projects upon taking office in January 2025. In December, the administration’s Bureau of Ocean Energy Management (BOEM) issued stop-work orders on five East Coast offshore wind projects that are fully permitted and over halfway complete. The TotalEnergies projects were not among the five. The payout to TotalEnergies comes after the administration <a href="https://www.joc.com/article/trump-administration-seeks-to-undo-court-rulings-favoring-offshore-wind-projects-6173748">began taking steps to reverse a sweep of recent court victories</a> for the five offshore wind projects as developers rush to complete work on the projects after courts allowed work to resume. Sam Salustro, senior vice president of policy and market affairs for industry group Oceantic Network, told the Journal of Commerce that TotalEnergies’ projects were still in the pre-environmental review phase when project cargo and logistics activity is limited. “These two projects were not well advanced in the development or permitting pipeline, so impacts stemming directly from this would be negligible,” he said. Salustro said that despite the project cancellations, the long-term trajectory of the US offshore wind industry remains secure because states continue to rely on wind as a foundational power source amid rapidly rising energy demands. “This is political theater meant to obscure the fact that offshore wind capacity is being pulled out of the pipeline when energy prices are skyrocketing, even as other offshore wind projects continue delivering reliable and affordable power to the grid,” he said. Under the agreement, TotalEnergies will reinvest the refunded lease fees to finance the construction of NextDecade Corp.’s Rio Grande liquefied natural gas (LNG) plant under way near Brownsville, Texas, and to support the development of other US gas production and export projects. TotalEnergies’ energy pivot comes at a time when LNG export capacity in the US, which is already the world’s largest LNG exporter, <a href="https://www.joc.com/article/lng-project-cargo-poised-for-us-boom-amid-war-6185867">is expected to nearly double in the next five years</a>, according to recent analyses by the US Energy Information Administration (EIA). <h3>Wind cargo shifting to Canada </h3>For facilities like the Port of Vancouver USA in Washington state, project cargo movement has been reflecting the move away from wind energy in the US. Alex Strogen, the port’s chief commercial officer, told the Journal of Commerce that he’s observed more wind cargo moving to Canada because of the falloff in US wind projects. “This is a shift that we’ve seen gaining momentum for the past three or four years,” he said. From a ports perspective, policies under Trump and former President Joe Biden have made wind farm installations more expensive, Strogen said. He cited Biden’s Inflation Reduction Act incentivizing manufacturers to move production to the US — creating short-term capital expenses while domestic supply chains were gaining their footing — and Trump’s push to dial back permits for wind farms on federal lands. Because Canadian ports don’t have the infrastructure in place to move massive wind turbine components, one silver lining for US facilities like the Port of Vancouver is that they have been able to capture some of Canada’s wind project cargo business. “The Port of Vancouver and the Port of Longview (Washington) have been taking advantage of the falloff of US wind projects and capitalizing on the relatively steady demand for wind farms going up historically in Alberta and Saskatchewan, and now we are seeing a shift into British Columbia as well,” Strogen said. Contact Autumn Cafiero Giusti at <a href="mailto:autumn@autumngiusti.com">autumn@autumngiusti.com.</a></div>

The cancellation of a pair of US offshore wind projects in exchange for a $1 billion payment from the Trump administration is the latest development to chip away at renewable project cargo opportunities. But the deal could potentially drive cargo for fossil fuel projects. French energy giant TotalEnergies signed off on a March 23 agreement to accept $1 billion from the US government to give up the leases on its two offshore wind projects — Carolina Long Bay and New York Bight — and instead pivot to the buildout of gas and power production and export facilities in the US. “Considering that the development of offshore wind projects is not in the country’s interest, we have decided to renounce offshore wind development in the United States in exchange for the reimbursement of the lease fees,” TotalEnergies chairman and CEO Patrick Pouyanné said in a statement. US offshore wind projects have come under attack by President Donald Trump, who issued an executive order banning new wind power projects upon taking office in January 2025. In December, the administration’s Bureau of Ocean Energy Management (BOEM) issued stop-work orders on five East Coast offshore wind projects that are fully permitted and over halfway complete. The TotalEnergies projects were not among the five. The payout to TotalEnergies comes after the administration began taking steps to reverse a sweep of recent court victories for the five offshore wind projects as developers rush to complete work on the projects after courts allowed work to resume. Sam Salustro, senior vice president of policy and market affairs for industry group Oceantic Network, told the Journal of Commerce that TotalEnergies’ projects were still in the pre-environmental review phase when project cargo and logistics activity is limited. “These two projects were not well advanced in the development or permitting pipeline, so impacts stemming directly from this would be negligible,” he said. Salustro said that despite the project cancellations, the long-term trajectory of the US offshore wind industry remains secure because states continue to rely on wind as a foundational power source amid rapidly rising energy demands. “This is political theater meant to obscure the fact that offshore wind capacity is being pulled out of the pipeline when energy prices are skyrocketing, even as other offshore wind projects continue delivering reliable and affordable power to the grid,” he said. Under the agreement, TotalEnergies will reinvest the refunded lease fees to finance the construction of NextDecade Corp.’s Rio Grande liquefied natural gas (LNG) plant under way near Brownsville, Texas, and to support the development of other US gas production and export projects. TotalEnergies’ energy pivot comes at a time when LNG export capacity in the US, which is already the world’s largest LNG exporter, is expected to nearly double in the next five years , according to recent analyses by the US Energy Information Administration (EIA). Wind cargo shifting to Canada For facilities like the Port of Vancouver USA in Washington state, project cargo movement has been reflecting the move away from wind energy in the US. Alex Strogen, the port’s chief commercial officer, told the Journal of Commerce that he’s observed more wind cargo moving to Canada because of the falloff in US wind projects. “This is a shift that we’ve seen gaining momentum for the past three or four years,” he said. From a ports perspective, policies under Trump and former President Joe Biden have made wind farm installations more expensive, Strogen said. He cited Biden’s Inflation Reduction Act incentivizing manufacturers to move production to the US — creating short-term capital expenses while domestic supply chains were gaining their footing — and Trump’s push to dial back permits for wind farms on federal lands. Because Canadian ports don’t have the infrastructure in place to move massive wind turbine components, one silver lining for US facilities like the Port of Vancouver is that they have been able to capture some of Canada’s wind project cargo business. “The Port of Vancouver and the Port of Longview (Washington) have been taking advantage of the falloff of US wind projects and capitalizing on the relatively steady demand for wind farms going up historically in Alberta and Saskatchewan, and now we are seeing a shift into British Columbia as well,” Strogen said. Contact Autumn Cafiero Giusti at autumn@autumngiusti.com.

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Offshore wind cancellations set up energy project pivot in the US

<div class="phx-topic abstract-wrapper">Ocean carriers have a stronger financial backstop than past downcycles after having retired significant debt and increased their profitability in the last five years post-pandemic, writes Executive Editor Mark Szakonyi.</div>

Ocean carriers have a stronger financial backstop than past downcycles after having retired significant debt and increased their profitability in the last five years post-pandemic, writes Executive Editor Mark Szakonyi.

<div class="phx-topic">This container shipping downcycle is shaping up to be “shallow,” and there’s an argument to be made that so-called ship overordering may be prudent in the long-term despite overcapacity rising over the next few years. Most immediately, ocean carriers have a stronger financial backstop than past downcycles, having retired significant debt after reaping $600 billion in operating profits from 2021-2024, said Rahul Kapoor, S&amp;P’ Global’s global head of shipping and analytics research. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6192742_0.1.jpg"></img></div>Average leverage for the industry, as measured by total debt to earnings before interest and taxes (EBIT), was a mere 1 to 2% between 2021-2025. Comparatively, the average leverage was in the range of 7 to 8% in 2012-2020. “When we look at the industry and when we look at this downturn which we are talking about, I think the industry is very well-prepared, and we have to look at that when we're talking about the container shipping downcycle which is going to come,” Kapoor said March 2 at the Journal of Commerce’s TPM26 conference in Long Beach. “So in our view, it's a shallow cycle.” Beyond driving record profits for the industry, the disruption during the pandemic set carriers on a more profitable course, recording EBIT margins of 21 to 22% in 2021-2025, compared to EBIT in the range of just 2 to 3% in the nine prior years, he said. The data is based only on carriers that report earnings, and thus excludes Mediterranean Shipping Co. Kapoor said he expected the container shipping industry to report losses over the next two or three years. Profitability is already falling. The average operating profit of major carriers fell to 5.3% for the fourth quarter of 2025 and was the first quarterly operating loss since the first quarter of 2024, according to analyst Alphaliner. But while overcapacity will pull balance sheets into the red in the coming years, container ship orders, representing more than one-third of the existing fleet, are a better bet than they appear, Kapoor said. In a capital-intensive industry, ordering more ships, partly to prepare for tighter decarbonization regulations, makes more sense than returning the profits to shareholders, he said. “Maybe (the industry) went a bit overboard. It always does. But the balance sheets are strong,” Kapoor said. “The cash buffers are extremely strong, and the windfall profits the industry saw were better utilized.” <h3>Why this order cycle is different </h3>Since 2020, there’s been two waves of ship orders, with the first between 2021-2024 being driven by record profits tied to pandemic-era disruption “They were all building and forming a long conga line with a glass of champagne in their hand, and they ordered,” Jan Tiedemann, senior analyst at Alphaliner, said at TPM26. “But now there's a second ordering wave going on. We have to think about why that is happening because this one is clearly deliberate, and it also focuses on more and smaller ships.” Whereas the first wave of orders centered on ships with capacities of up to 24,000 TEUs, the second wave is dominated by orders of small ships with capacities under 6,000 TEUs. Non-operating common carriers are also driving the ordering of small ships. ”Since roughly 2005, if you look at the fleet and the fleet growth over these 20 years, it’s gone up in an almost linear way,” Tiedemann said. “It’s 1 million (TEUs) added year-in, year-out, and it’s almost stable.” Industry consolidation, with the top 10 carriers operating 85% of the total fleet compared to 65% a decade ago, and record profits during the pandemic give the major ocean carriers confidence in the long-game, he said. “They understood that the ship is an asset which probably can break even for 10 years of its lifetime, probably can be slightly loss-making for another 10 years of its lifetime, but then makes all its money back in five years,” said Tiedemann. “So you have that asset, and especially in this time of constant disruption, where we're going into a phase, that disruption is the new normal.” Not all container lines were able to capitalize on the disruption caused by diversions away from the Suez Canal starting in late 2023 because they failed to order enough tonnage, Tiedemann said. Carriers without enough tonnage for the longer sailings around the Cape of Good Hope had to turn to more expensive chartering and buying secondhand ships. Simon Heaney, senior manager of container research at Drewry, doesn’t see the massive order book as benign as others. Betting on a ‘black swan’ event to cause disruption and soak up functional capacity “doesn’t constitute as a plan,” he said. “Also, over-ordering means they are not fully capitalizing on the given situation,” Heaney said. “A smarter bet would have been to limit orders as they would win in any scenario without the expense.” Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a></div>

This container shipping downcycle is shaping up to be “shallow,” and there’s an argument to be made that so-called ship overordering may be prudent in the long-term despite overcapacity rising over the next few years. Most immediately, ocean carriers have a stronger financial backstop than past downcycles, having retired significant debt after reaping $600 billion in operating profits from 2021-2024, said Rahul Kapoor, S&P’ Global’s global head of shipping and analytics research. Average leverage for the industry, as measured by total debt to earnings before interest and taxes (EBIT), was a mere 1 to 2% between 2021-2025. Comparatively, the average leverage was in the range of 7 to 8% in 2012-2020. “When we look at the industry and when we look at this downturn which we are talking about, I think the industry is very well-prepared, and we have to look at that when we're talking about the container shipping downcycle which is going to come,” Kapoor said March 2 at the Journal of Commerce’s TPM26 conference in Long Beach. “So in our view, it's a shallow cycle.” Beyond driving record profits for the industry, the disruption during the pandemic set carriers on a more profitable course, recording EBIT margins of 21 to 22% in 2021-2025, compared to EBIT in the range of just 2 to 3% in the nine prior years, he said. The data is based only on carriers that report earnings, and thus excludes Mediterranean Shipping Co. Kapoor said he expected the container shipping industry to report losses over the next two or three years. Profitability is already falling. The average operating profit of major carriers fell to 5.3% for the fourth quarter of 2025 and was the first quarterly operating loss since the first quarter of 2024, according to analyst Alphaliner. But while overcapacity will pull balance sheets into the red in the coming years, container ship orders, representing more than one-third of the existing fleet, are a better bet than they appear, Kapoor said. In a capital-intensive industry, ordering more ships, partly to prepare for tighter decarbonization regulations, makes more sense than returning the profits to shareholders, he said. “Maybe (the industry) went a bit overboard. It always does. But the balance sheets are strong,” Kapoor said. “The cash buffers are extremely strong, and the windfall profits the industry saw were better utilized.” Why this order cycle is different Since 2020, there’s been two waves of ship orders, with the first between 2021-2024 being driven by record profits tied to pandemic-era disruption “They were all building and forming a long conga line with a glass of champagne in their hand, and they ordered,” Jan Tiedemann, senior analyst at Alphaliner, said at TPM26. “But now there's a second ordering wave going on. We have to think about why that is happening because this one is clearly deliberate, and it also focuses on more and smaller ships.” Whereas the first wave of orders centered on ships with capacities of up to 24,000 TEUs, the second wave is dominated by orders of small ships with capacities under 6,000 TEUs. Non-operating common carriers are also driving the ordering of small ships. ”Since roughly 2005, if you look at the fleet and the fleet growth over these 20 years, it’s gone up in an almost linear way,” Tiedemann said. “It’s 1 million (TEUs) added year-in, year-out, and it’s almost stable.” Industry consolidation, with the top 10 carriers operating 85% of the total fleet compared to 65% a decade ago, and record profits during the pandemic give the major ocean carriers confidence in the long-game, he said. “They understood that the ship is an asset which probably can break even for 10 years of its lifetime, probably can be slightly loss-making for another 10 years of its lifetime, but then makes all its money back in five years,” said Tiedemann. “So you have that asset, and especially in this time of constant disruption, where we're going into a phase, that disruption is the new normal.” Not all container lines were able to capitalize on the disruption caused by diversions away from the Suez Canal starting in late 2023 because they failed to order enough tonnage, Tiedemann said. Carriers without enough tonnage for the longer sailings around the Cape of Good Hope had to turn to more expensive chartering and buying secondhand ships. Simon Heaney, senior manager of container research at Drewry, doesn’t see the massive order book as benign as others. Betting on a ‘black swan’ event to cause disruption and soak up functional capacity “doesn’t constitute as a plan,” he said. “Also, over-ordering means they are not fully capitalizing on the given situation,” Heaney said. “A smarter bet would have been to limit orders as they would win in any scenario without the expense.” Contact Mark Szakonyi at  mark.szakonyi@spglobal.com

Container shipping faces ‘shallow’ downcycle amid strong carrier finances

<div class="phx-topic abstract-wrapper">The Iran-driven fuel spike has created the widest intermodal cost advantage in years, but capturing it — and keeping it — requires something railroads have rarely practiced: orchestrated intermodal, writes Paul Tonsager.</div>

The Iran-driven fuel spike has created the widest intermodal cost advantage in years, but capturing it — and keeping it — requires something railroads have rarely practiced: orchestrated intermodal, writes Paul Tonsager.

<div class="phx-topic">Gulf Coast diesel hit $5.13 per gallon for the week ending March 23 — up 30 cents in a single week and still the cheapest regional price in the country, according to government data. East Coast truckers are paying $5.48; California operators are staring at $6.87. For long-haul carriers already squeezed by two years of overcapacity and compressed margins, the Middle East conflict’s disruption to Strait of Hormuz crude flows has turned a manageable cost structure into a cash hemorrhage. <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6192409_0.1.jpg"></img></div>For railroads and intermodal marketing companies (IMCs), this is the moment they have been waiting for since freight markets went soft in 2023. The fuel efficiency advantage of rail is not new. Most beneficial cargo owners (BCOs) have already run the numbers — and until now, trucking won. What is new is that the price spread has widened to the point where the math is changing answers that shippers thought were settled. That question is the gift. Namely, what railroads do with it — and what their entire partner network does with it — determines whether the next 12 months represent a lasting franchise expansion or another cycle of mode-shift freight that returns to trucks the moment diesel retreats. <h3>Sell the network, not the lane </h3>When a shipper calls because diesel just hit $5 per gallon, the instinct is to quote the lane they asked about and close the booking. That is the wrong move. A shipper under fuel pressure is not just repricing one lane — they are repricing their entire transportation wallet. Railroads and IMCs that arrive with a network proposal — (“here is your freight portfolio across high-density corridors, here is the landed cost comparison across your full book”) — will capture meaningful wallet share, not just the lane that prompted the call. The shipper asking about Chicago-to-Dallas may have 10 corridors where intermodal is now the better economic answer. Sell the lane and you win the booking. Sell the network and you win the account. <h3>Orchestrated intermodal </h3>Here is the part most railroads get wrong even when the commercial conversation goes well: The railroad cannot retain the shipper alone — and when it was talking to the shipper directly, it was a strategy call, not the day-to-day operational relationship that actually creates loyalty. To the BCO, the underlying carriers — the steamship line, the dray operator, the chassis pool — are largely unknown. The IMC is the only throat to choke. When something breaks, that call goes to the IMC. And if the IMC can’t fix it, the freight goes back to trucking. But here is the structural reality: Railroads have largely ceded the BCO relationship to their wholesale partners — the steamship lines and IMCs who hold the direct commercial connection to the cargo owner. That is not a failure; it is the model. The liner and the IMC own the loyalty, the wallet conversation, and the export opportunity as BCOs move polyethylene and other commodities into Atlantic markets. The railroad’s job is not to reclaim that relationship — it is to make its wholesale partners effective enough orchestrators that the freight stays on rail. That means investing in the partners, not competing with them. Shared visibility tools. Service commitments at the account level, not just the corridor level. Chassis and terminal performance the IMC can actually promise a BCO without hedging. Winning this window — and I borrow that term from tech, where timing a market shift is the whole game — requires the railroad to function as the backbone of orchestrated intermodal, enabling the steamship lines and IMCs who own the customer to deliver on the promise. <h3>Is your tech stack ready to orchestrate? </h3>That is the question every railroad and IMC should be asking because orchestrated intermodal is not a commercial concept; it is a technology commitment. Can you see the dray carrier’s ETA in real time, or are you still making phone calls? Is chassis pool visibility live, or a spreadsheet updated twice a day? Is terminal dwell data current enough to intervene before a shipper’s container becomes a problem? Can your systems flag new conversion accounts showing stress signals before the shipper calls their broker? Orchestration requires account-level visibility — knowing that this shipper’s container, on this lane, with this dray partner, is at risk right now. The technology exists: visibility platforms, AI-driven exception management, connected partner APIs. The question is whether a diesel spike is finally the urgency that accelerates the investment. Show up with a rate sheet but not a visibility platform and you win the booking and lose the account. Show up with both and you build something that outlasts the fuel cycle. The diesel spike hands railroads the invitation. Orchestrating the entire service chain — and the technology behind it — to deliver on it is entirely up to them. Paul Tonsager is founder and principal of IMS Advisory and writes the Signals &amp; Switches newsletter on freight strategy at aet1998.substack.com. Contact him at <a href="mailto:paul.tonsager@multimodalsolutions.io">paul.tonsager@multimodalsolutions.io</a>.</div>

Gulf Coast diesel hit $5.13 per gallon for the week ending March 23 — up 30 cents in a single week and still the cheapest regional price in the country, according to government data. East Coast truckers are paying $5.48; California operators are staring at $6.87. For long-haul carriers already squeezed by two years of overcapacity and compressed margins, the Middle East conflict’s disruption to Strait of Hormuz crude flows has turned a manageable cost structure into a cash hemorrhage. For railroads and intermodal marketing companies (IMCs), this is the moment they have been waiting for since freight markets went soft in 2023. The fuel efficiency advantage of rail is not new. Most beneficial cargo owners (BCOs) have already run the numbers — and until now, trucking won. What is new is that the price spread has widened to the point where the math is changing answers that shippers thought were settled. That question is the gift. Namely, what railroads do with it — and what their entire partner network does with it — determines whether the next 12 months represent a lasting franchise expansion or another cycle of mode-shift freight that returns to trucks the moment diesel retreats. Sell the network, not the lane When a shipper calls because diesel just hit $5 per gallon, the instinct is to quote the lane they asked about and close the booking. That is the wrong move. A shipper under fuel pressure is not just repricing one lane — they are repricing their entire transportation wallet. Railroads and IMCs that arrive with a network proposal — (“here is your freight portfolio across high-density corridors, here is the landed cost comparison across your full book”) — will capture meaningful wallet share, not just the lane that prompted the call. The shipper asking about Chicago-to-Dallas may have 10 corridors where intermodal is now the better economic answer. Sell the lane and you win the booking. Sell the network and you win the account. Orchestrated intermodal Here is the part most railroads get wrong even when the commercial conversation goes well: The railroad cannot retain the shipper alone — and when it was talking to the shipper directly, it was a strategy call, not the day-to-day operational relationship that actually creates loyalty. To the BCO, the underlying carriers — the steamship line, the dray operator, the chassis pool — are largely unknown. The IMC is the only throat to choke. When something breaks, that call goes to the IMC. And if the IMC can’t fix it, the freight goes back to trucking. But here is the structural reality: Railroads have largely ceded the BCO relationship to their wholesale partners — the steamship lines and IMCs who hold the direct commercial connection to the cargo owner. That is not a failure; it is the model. The liner and the IMC own the loyalty, the wallet conversation, and the export opportunity as BCOs move polyethylene and other commodities into Atlantic markets. The railroad’s job is not to reclaim that relationship — it is to make its wholesale partners effective enough orchestrators that the freight stays on rail. That means investing in the partners, not competing with them. Shared visibility tools. Service commitments at the account level, not just the corridor level. Chassis and terminal performance the IMC can actually promise a BCO without hedging. Winning this window — and I borrow that term from tech, where timing a market shift is the whole game — requires the railroad to function as the backbone of orchestrated intermodal, enabling the steamship lines and IMCs who own the customer to deliver on the promise. Is your tech stack ready to orchestrate? That is the question every railroad and IMC should be asking because orchestrated intermodal is not a commercial concept; it is a technology commitment. Can you see the dray carrier’s ETA in real time, or are you still making phone calls? Is chassis pool visibility live, or a spreadsheet updated twice a day? Is terminal dwell data current enough to intervene before a shipper’s container becomes a problem? Can your systems flag new conversion accounts showing stress signals before the shipper calls their broker? Orchestration requires account-level visibility — knowing that this shipper’s container, on this lane, with this dray partner, is at risk right now. The technology exists: visibility platforms, AI-driven exception management, connected partner APIs. The question is whether a diesel spike is finally the urgency that accelerates the investment. Show up with a rate sheet but not a visibility platform and you win the booking and lose the account. Show up with both and you build something that outlasts the fuel cycle. The diesel spike hands railroads the invitation. Orchestrating the entire service chain — and the technology behind it — to deliver on it is entirely up to them. Paul Tonsager is founder and principal of IMS Advisory and writes the Signals & Switches newsletter on freight strategy at aet1998.substack.com. Contact him at paul.tonsager@multimodalsolutions.io .

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