<div class="phx-topic abstract-wrapper">Australia has secured a significant competitive advantage in the lucrative Japanese beef market over its main rival, the United States.</div>

Australia has secured a significant competitive advantage in the lucrative Japanese beef market over its main rival, the United States.

<div>Australia has secured a significant competitive advantage in the lucrative Japanese beef market over its main rival, the United States.After seven years of negotiations, Japan and Australia have reached a broad agreement on a bilateral free trade agreement aimed at eliminating import tariffs on most products traded between them. The deal came during a meeting in Tokyo yesterday evening with Japanese Prime Minister Shinzo Abe and his Australian counterpart, Tony Abbott.The two countries are expected to formally sign the FTA, officially called the Japan-Australia Economic Partnership Agreement, as early as this summer, paving the way for its entry into force...

Australia has secured a significant competitive advantage in the lucrative Japanese beef market over its main rival, the United States. After seven years of negotiations, Japan and Australia have reached a broad agreement on a bilateral free trade agreement aimed at eliminating import tariffs on most products traded between them. The deal came during a meeting in Tokyo yesterday evening with Japanese Prime Minister Shinzo Abe and his Australian counterpart, Tony Abbott. The two countries are expected to formally sign the FTA, officially called the Japan-Australia Economic Partnership Agreement, as early as this summer, paving the way for its entry into force sometime next year. Japan has so far seen its FTAs with 12 countries and the 10-member Association of Southeast Asian Nations as a whole going into effect, but Australia is the first major agricultural exporting country to secure an FTA with Japan. Japan and Australia reached the broad agreement on the FTA after resolving the dispute over Japan’s import tariffs on Australian beef, the biggest sticking point in the negotiations. Tokyo has agreed to lower its tariffs on Australian beef in stages from the current 38.5 percent. The tariff on frozen beef, which is mainly used for processed foods for restaurants, will be cut to 19.5 percent in 18 years, while the tariff on chilled beef, which is mainly sold at supermarkets, will be cut to 23.5 percent in 15 years. U.S. containerized exports of beef to Japan have risen every year since 2007. Full-size image Australia is the biggest beef exporter to Japan, but the U.S. is fast gaining on Australia in the Japanese market. U.S. containerized exports of beef to Japan have risen every year since 2007, reaching nearly 25,000 TEUs in 2013, according to PIERS, the Data Division of JOC Group. Japan’s market share of U.S. containerized beef exports has also increased from 26.9 percent in 2007 to 36.5 percent in 2013. Canberra, Australia’s capital, initially called for an elimination of Japanese import tariffs on Australian beef, but it softened its position and accepted lower tariffs apparently in the hope of gaining a competitive advantage over the U.S. The Australian government described the FTA with Japan as “historic” in a press release and said that better access to the Japanese market for key agriculture products, including beef, “will give Australia a head start over our competitors in this market.” “JAEPA represents a major windfall for Australian beef – our biggest agricultural export to Japan,” the Australian government said. “This includes a halving of the tariff on frozen beef from 38.5 percent to 19.5 percent, with deep cuts in the first year.” The FTA with Australia will also benefit Japan as Canberra has agreed to eliminate its import tariffs on Japanese cars. Canberra has also agreed to exclude rice, Japan’s most politically sensitive item, from tariff elimination or reduction. American beef will continue to be subject to Japanese import tariffs of 38.5 percent. Japan hopes the trade deal with Australia will put pressure on the U.S. to soften its position in bilateral negotiations over the proposed Trans-Pacific Partnership free trade agreement. The TPP is a U.S.-led regional free trade initiative currently being negotiated among the U.S., Japan, Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The overall TPP negotiations have stalled due largely to sharp differences between Japan and the U.S. over farm trade. Japan wants to protect five domestic agricultural products, including beef and pork as well as rice, from foreign competition, but the U.S. is calling for Japan to remove its import tariffs on foreign products. Akira Amari, Japan’s state minister in charge of the TPP talks, is expected to hold negotiations with U.S. Trade Representative Michael Froman in Tokyo tomorrow in an attempt to achieve a breakthrough in the deadlocked bilateral negotiations ahead of U.S. President Barak Obama’s planned visit to the Japanese capital later this month. Contact Hisane Masaki at yiu45535@nifty.com .

Transport, Trade and Regulation News

Australia Outfoxes US Over Japan Trade

<div class="phx-topic abstract-wrapper">The product launched this week by Triumph, called Capacity Intelligence, allows brokers to identify lanes where it needs a deeper pool of reliable carriers.</div>

The product launched this week by Triumph, called Capacity Intelligence, allows brokers to identify lanes where it needs a deeper pool of reliable carriers.

Feature image

<div class="phx-topic">Freight financial services and technology provider Triumph has unveiled a new product it says is aimed at allowing freight brokers to “turn transactional [truckload] capacity into relationships.” The product, called Capacity Intelligence, was launched this week and gives brokers a tool to identify lanes where it can strengthen existing carrier relationships or source capacity from Triumph’s network of vetted carriers. The goal of the product, Triumph said, is to create cost savings for brokers as they manage an environment where spot rates are increasing. "Capacity Intelligence delivers on the promise of combining predictive rates and service-level performance benchmarks with the Triumph network's uniquely granular and reliable transaction data,” Dawn Favier, president of Triumph Intelligence, said in a statement. “This tool empowers freight brokers to move beyond reactive, transactional sourcing and build a resilient, high-quality strategic carrier network." That carrier network includes thousands of carriers using Triumph for financial services, most notably factoring and quick-pay products. Capacity Intelligence was released five months after Triumph launched another product, Pricing and Performance Intelligence, to help brokers incorporate carrier-specific performance data and available capacity beyond their existing network into pricing decisions. Taken together, the tools can be seen as a load board of sorts in that they allow brokers to piece together, in real time, capacity availability and carrier performance metrics to assess the suitability for a specific load they need to move on behalf of shipper customers. Both tools are built on Triumph’s <a href="https://www.joc.com/article/triumph-acquires-broker-focused-pricing-technology-provider-greenscreensai-5951484">acquisitions of pricing intelligence provider Greenscreens.ai</a>and carrier performance measurement tool Isometric Technologies in early 2025 and late 2024, respectively. The enhancements to carrier pricing and performance information expanded Triumph’s reach from a freight financial service provider to one helping brokers with freight procurement decision-making. The tools also cloud the load board picture further, with the largest providers, DAT Freight &amp; Analytics and Truckstop.com, having themselves waded into financial services over the last year through acquisitions of factoring services companies. Additionally, carrier vetting platform Highway, a strategic partner of Triumph, unveiled a load board in the second half of 2025. Contact Eric Johnson at eric.johnson@spglobal.com. </div>

Freight financial services and technology provider Triumph has unveiled a new product it says is aimed at allowing freight brokers to “turn transactional [truckload] capacity into relationships.” The product, called Capacity Intelligence, was launched this week and gives brokers a tool to identify lanes where it can strengthen existing carrier relationships or source capacity from Triumph’s network of vetted carriers. The goal of the product, Triumph said, is to create cost savings for brokers as they manage an environment where spot rates are increasing. "Capacity Intelligence delivers on the promise of combining predictive rates and service-level performance benchmarks with the Triumph network's uniquely granular and reliable transaction data,” Dawn Favier, president of Triumph Intelligence, said in a statement. “This tool empowers freight brokers to move beyond reactive, transactional sourcing and build a resilient, high-quality strategic carrier network." That carrier network includes thousands of carriers using Triumph for financial services, most notably factoring and quick-pay products. Capacity Intelligence was released five months after Triumph launched another product, Pricing and Performance Intelligence, to help brokers incorporate carrier-specific performance data and available capacity beyond their existing network into pricing decisions. Taken together, the tools can be seen as a load board of sorts in that they allow brokers to piece together, in real time, capacity availability and carrier performance metrics to assess the suitability for a specific load they need to move on behalf of shipper customers. Both tools are built on Triumph’s acquisitions of pricing intelligence provider Greenscreens.ai and carrier performance measurement tool Isometric Technologies in early 2025 and late 2024, respectively. The enhancements to carrier pricing and performance information expanded Triumph’s reach from a freight financial service provider to one helping brokers with freight procurement decision-making. The tools also cloud the load board picture further, with the largest providers, DAT Freight & Analytics and Truckstop.com, having themselves waded into financial services over the last year through acquisitions of factoring services companies. Additionally, carrier vetting platform Highway, a strategic partner of Triumph, unveiled a load board in the second half of 2025. Contact Eric Johnson at eric.johnson@spglobal.com.

Logistics Technology News

Truck brokers

Truckload

New truckload capacity product provides another load board option for brokers

<div class="phx-topic abstract-wrapper">The rule will likely mean a slow trickle of capacity exiting the trucking market, although the industry and analysts are split on the exact impact.</div>

The rule will likely mean a slow trickle of capacity exiting the trucking market, although the industry and analysts are split on the exact impact.

<div class="phx-topic">The Federal Motor Carrier Safety Administration (FMCSA) has released its final rule on non-domiciled commercial driver’s licenses (CDLs), something that has the trucking industry split on its potential impact on capacity and pricing. The rule, released Wednesday, would limit future CDL eligibility to foreign nationals who hold H-2A, H-2B, or E-2 nonimmigrant status. It would eliminate other immigrants in the US on H-1B visas, as well as asylum seekers, those here on temporary protected status, and those part of the Deferred Action for Childhood Arrivals from Canada or Mexico program. The Interim Final Rule (IFR) would also require state agencies to check all applicants against federal databases to verify immigration status and perform in-person renewals every year. It also eliminates an employment authorization document as valid proof of lawful presence in the US. The rule is forward-looking and does not apply retroactively to existing licenses on day one. “With regard to drivers who currently hold an unexpired non-domiciled CLP [commercial learner’s permit] or CDL that was properly issued under pre-IFR rules, nothing in this final rule requires states to proactively revoke those licenses,” the rule states. “However, at the next license transaction following the effective date of this final rule, states are required to apply the new eligibility standards.” The FMCSA states that H-2A, H-2B, and E-2 visa applicants undergo vetting that includes US consular assessment of English proficiency relevant to commercial driving safety, such as the ability to understand traffic signs and respond to official inquiries. <h3>Impact unclear </h3>The US Department of Transportation has estimated that up to 194,000 non-domiciled CDLs might be susceptible to not being renewed under the new rules, raising questions about the effect on capacity in the market. Some industry executives argue that enforcement activity — rather than the rule itself — <a href="https://www.joc.com/article/impact-of-non-domiciled-cdl-enforcement-splits-us-trucking-sector-6135184">could have a more immediate effect on capacity</a>. However, it is unclear how many non-domiciled CDL holders would ultimately be impacted, as enforcement would gradually occur over the lifespan of existing CDLs, which are valid for five years. There is also the risk of litigation. A truck driver named Jorge Rivera Lujan, along with multiple public interest groups, filed a lawsuit challenging an emergency rule covering the CDL issue last October. An appeals court issued an administrative stay and requested an update from the FMCSA to update the court on March 3, 2026. “Resolution of the court cases challenging the final rule will take a long time,” law firm Scopelitis, Garvin, Light, Hanson &amp; Feary wrote in a December note to clients. “It is possible any challenge may ultimately end up at the Supreme Court.” Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

The Federal Motor Carrier Safety Administration (FMCSA) has released its final rule on non-domiciled commercial driver’s licenses (CDLs), something that has the trucking industry split on its potential impact on capacity and pricing. The rule, released Wednesday, would limit future CDL eligibility to foreign nationals who hold H-2A, H-2B, or E-2 nonimmigrant status. It would eliminate other immigrants in the US on H-1B visas, as well as asylum seekers, those here on temporary protected status, and those part of the Deferred Action for Childhood Arrivals from Canada or Mexico program. The Interim Final Rule (IFR) would also require state agencies to check all applicants against federal databases to verify immigration status and perform in-person renewals every year. It also eliminates an employment authorization document as valid proof of lawful presence in the US. The rule is forward-looking and does not apply retroactively to existing licenses on day one. “With regard to drivers who currently hold an unexpired non-domiciled CLP [commercial learner’s permit] or CDL that was properly issued under pre-IFR rules, nothing in this final rule requires states to proactively revoke those licenses,” the rule states. “However, at the next license transaction following the effective date of this final rule, states are required to apply the new eligibility standards.” The FMCSA states that H-2A, H-2B, and E-2 visa applicants undergo vetting that includes US consular assessment of English proficiency relevant to commercial driving safety, such as the ability to understand traffic signs and respond to official inquiries. Impact unclear The US Department of Transportation has estimated that up to 194,000 non-domiciled CDLs might be susceptible to not being renewed under the new rules, raising questions about the effect on capacity in the market. Some industry executives argue that enforcement activity — rather than the rule itself — could have a more immediate effect on capacity . However, it is unclear how many non-domiciled CDL holders would ultimately be impacted, as enforcement would gradually occur over the lifespan of existing CDLs, which are valid for five years. There is also the risk of litigation. A truck driver named Jorge Rivera Lujan, along with multiple public interest groups, filed a lawsuit challenging an emergency rule covering the CDL issue last October. An appeals court issued an administrative stay and requested an update from the FMCSA to update the court on March 3, 2026. “Resolution of the court cases challenging the final rule will take a long time,” law firm Scopelitis, Garvin, Light, Hanson & Feary wrote in a December note to clients. “It is possible any challenge may ultimately end up at the Supreme Court.” Contact Ari Ashe at ari.ashe@spglobal.com .

Trucking News

Trucking labor

Surface

USDOT releases interim final rule on non-domiciled CDL holders

<div class="phx-topic abstract-wrapper">Downward pressure on rates is set to continue with just over 1 million TEUs of capacity via ships above 10,000 TEUs scheduled to be delivered this year. </div>

Downward pressure on rates is set to continue with just over 1 million TEUs of capacity via ships above 10,000 TEUs scheduled to be delivered this year.

<div class="phx-topic">The urgent need to increase the virtually non-existent scrapping of old container ships as new vessels flood online is a key challenge for the industry as it navigates an increasingly oversupplied market, according to carriers and analysts. Pre-tax quarterly losses have already appeared on the balance sheets of <a href="https://www.joc.com/article/gemini-benefits-face-looming-challenge-from-oversupplied-market-maersk-ceo-6164887">Maersk</a>, its first in two years; and <a href="https://www.joc.com/article/frontloading-drags-one-to-a-loss-in-its-fiscal-third-quarter-6161263">Ocean Network Express</a>, its first quarterly loss since the second quarter of 2018; with <a href="https://www.joc.com/article/fourth-quarter-rate-slump-drags-down-hapag-lloyds-2025-financials-6166755">Hapag-Lloyd</a> and <a href="https://www.joc.com/article/hmm-profitability-falls-as-carrier-warns-of-growing-supply-demand-imbalance-6167842">HMM</a> both reporting steep declines in fourth-quarter profitability. Downward pressure on rates is set to continue with just over 1 million TEUs of capacity via ships above 10,000 TEUs scheduled to be delivered this year. That will be followed by 2.3 million TEUs of capacity due for delivery in 2027 and 3.4 million TEUs in 2028, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. There is no sign of carriers pausing ship orders, either. A record 4.8 million TEUs of new ship capacity was ordered in 2025, and that momentum has carried into 2026 with another 290,000 TEUs ordered in January, according to maritime consultancy Drewry. Even as the capacity overhang is pushed further out, scrapping remains at negligible levels. Drewry said <a href="https://www.drewry.co.uk/container-insight-weekly/weekly-feature-articles/bath-taps-wide-open-for-new-containerships">in its container insight</a> that 6,000 TEUs of capacity was scrapped in 2025, while Alphaliner puts the number slightly higher at 8,172 TEUs, calling it the lowest number in 20 years, according to their data. Shipping association Bimco estimated late last year that the share of ships 20 years old or older in the global fleet had increased from 16% at the beginning of 2020 to about 24%, putting the recycling overhang at 500 ships with a combined capacity of 1.8 million TEUs. <h3>Challenge to profitability </h3>In the financial results announced so far by ocean carriers, overcapacity was highlighted as a significant challenge to profitability. The most optimistic prediction is for global volumes to grow 4% this year, but with the steady influx of new ships and a return of some services to the Suez Canal, Maersk is expecting overcapacity in 2026 to be as high as 8%. The severe impact of overcapacity on the market and a reluctance of carriers to scrap older vessels was outlined in Maersk’s 2026 profitability forecast announced last week. Faced with a return to the Suez and new industry capacity coming online, Maersk flagged a potential $1.5 billion loss in its full-year earnings before interest and taxes for 2026; it would be the first operating loss the carrier has booked in 10 years. The top end of the profit guidance was set at $1 billion, $2.5 billion less than last year’s result. “The pace and extent of scrapping will influence whether the company reaches the upper or lower end of its financial guidance for the year,” Maersk CEO Vincent Clerc said on last week’s earnings call, noting that an increase in scrapping would likely be triggered by a wider industry return to the Suez. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="994022ec-453b-46eb-b729-fcd589a9082d"></dynamic-object></div>Alphaliner took a similar view and is anticipating a rally of recycling in the second half of 2026, but only if the Suez route is once again widely used. Should Cape of Good Hope diversions continue through the year — along with the expected healthy cargo volumes, a moderate amount of newbuilding deliveries and a persistently tight supply of chartered tonnage — trading conditions could be good enough for shipowners to mostly stay clear of the recycling scene. “The rebound in scrapping would then be deferred to 2027 and 2028 when the colossal amount of newbuilding deliveries expected to hit the water during these two years will force a streamlining of the fleet,” Alphaliner noted. <h3>Over-ordering ‘a hard-wired habit’ </h3>Drewry’s five-year forecast includes a material increase in scrapping and is based on market conditions and nearly 1.5 million TEUs of the global fleet being at least 25 years old. Still, the consultancy warned that excess capacity would remain. “Over-ordering and limited demolitions have become consistent features of the industry over the past 15 or so years,” Drewry wrote in its container insight. “Therefore, one might question if this is a hard-wired habit that carriers will not be able to shake. Consolidation and bigger alliances were supposed to bring about more control, but there is little evidence of it to date.” Ocean carriers are already aggressively managing capacity through blank sailings and slow steaming, but Drewry said if scrapping levels did not increase soon, carriers would have to consider a further reduction in speed. “Spending billions on new hardware, only to then operate them significantly below design speed seems an inefficient waste,” Drewry said. “It would be better to tackle the problem at source and start removing vintage ships at scale.” Container shipping on the major east-west trades is now firmly in a buyers’ market, but Drewry warned shippers not to get too comfortable with that position. “While carrier behavior is notoriously difficult to predict, we have to assume that lines will not sit back idly and allow the market to drift against them without a fight,” the consultant noted. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The urgent need to increase the virtually non-existent scrapping of old container ships as new vessels flood online is a key challenge for the industry as it navigates an increasingly oversupplied market, according to carriers and analysts. Pre-tax quarterly losses have already appeared on the balance sheets of Maersk , its first in two years; and Ocean Network Express , its first quarterly loss since the second quarter of 2018; with Hapag-Lloyd and HMM both reporting steep declines in fourth-quarter profitability. Downward pressure on rates is set to continue with just over 1 million TEUs of capacity via ships above 10,000 TEUs scheduled to be delivered this year. That will be followed by 2.3 million TEUs of capacity due for delivery in 2027 and 3.4 million TEUs in 2028, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. There is no sign of carriers pausing ship orders, either. A record 4.8 million TEUs of new ship capacity was ordered in 2025, and that momentum has carried into 2026 with another 290,000 TEUs ordered in January, according to maritime consultancy Drewry. Even as the capacity overhang is pushed further out, scrapping remains at negligible levels. Drewry said in its container insight that 6,000 TEUs of capacity was scrapped in 2025, while Alphaliner puts the number slightly higher at 8,172 TEUs, calling it the lowest number in 20 years, according to their data. Shipping association Bimco estimated late last year that the share of ships 20 years old or older in the global fleet had increased from 16% at the beginning of 2020 to about 24%, putting the recycling overhang at 500 ships with a combined capacity of 1.8 million TEUs. Challenge to profitability In the financial results announced so far by ocean carriers, overcapacity was highlighted as a significant challenge to profitability. The most optimistic prediction is for global volumes to grow 4% this year, but with the steady influx of new ships and a return of some services to the Suez Canal, Maersk is expecting overcapacity in 2026 to be as high as 8%. The severe impact of overcapacity on the market and a reluctance of carriers to scrap older vessels was outlined in Maersk’s 2026 profitability forecast announced last week. Faced with a return to the Suez and new industry capacity coming online, Maersk flagged a potential $1.5 billion loss in its full-year earnings before interest and taxes for 2026; it would be the first operating loss the carrier has booked in 10 years. The top end of the profit guidance was set at $1 billion, $2.5 billion less than last year’s result. “The pace and extent of scrapping will influence whether the company reaches the upper or lower end of its financial guidance for the year,” Maersk CEO Vincent Clerc said on last week’s earnings call, noting that an increase in scrapping would likely be triggered by a wider industry return to the Suez. Alphaliner took a similar view and is anticipating a rally of recycling in the second half of 2026, but only if the Suez route is once again widely used. Should Cape of Good Hope diversions continue through the year — along with the expected healthy cargo volumes, a moderate amount of newbuilding deliveries and a persistently tight supply of chartered tonnage — trading conditions could be good enough for shipowners to mostly stay clear of the recycling scene. “The rebound in scrapping would then be deferred to 2027 and 2028 when the colossal amount of newbuilding deliveries expected to hit the water during these two years will force a streamlining of the fleet,” Alphaliner noted. Over-ordering ‘a hard-wired habit’ Drewry’s five-year forecast includes a material increase in scrapping and is based on market conditions and nearly 1.5 million TEUs of the global fleet being at least 25 years old. Still, the consultancy warned that excess capacity would remain. “Over-ordering and limited demolitions have become consistent features of the industry over the past 15 or so years,” Drewry wrote in its container insight. “Therefore, one might question if this is a hard-wired habit that carriers will not be able to shake. Consolidation and bigger alliances were supposed to bring about more control, but there is little evidence of it to date.” Ocean carriers are already aggressively managing capacity through blank sailings and slow steaming, but Drewry said if scrapping levels did not increase soon, carriers would have to consider a further reduction in speed. “Spending billions on new hardware, only to then operate them significantly below design speed seems an inefficient waste,” Drewry said. “It would be better to tackle the problem at source and start removing vintage ships at scale.” Container shipping on the major east-west trades is now firmly in a buyers’ market, but Drewry warned shippers not to get too comfortable with that position. “While carrier behavior is notoriously difficult to predict, we have to assume that lines will not sit back idly and allow the market to drift against them without a fight,” the consultant noted. Contact Greg Knowler at greg.knowler@spglobal.com .

Container lines

Container Shipping News

Maritime

Scrapping strategy looms large in 2026 as carriers manage growing oversupply

<div class="phx-topic abstract-wrapper">The fourth-largest US domestic intermodal provider has received additional funding and now must focus on meeting revenue and expenditure targets through the second quarter.</div>

The fourth-largest US domestic intermodal provider has received additional funding and now must focus on meeting revenue and expenditure targets through the second quarter.

<div class="phx-topic">STG Logistics has received $40 million in new funding and another reserve fund of $25 million after a deal was reached between lenders ahead of a key hearing before a New Jersey bankruptcy court. The deal agreed to on Tuesday results in a temporary truce between two lenders who sued STG Logistics in a New York court and a group of lenders who provided the rescue funds when <a href="https://www.joc.com/article/stg-files-ch-11-bankruptcy-but-intermodal-operations-remain-intact-6150641">the bankruptcy was filed on Jan. 12</a>. STG operates a thriving transloading and drayage business and is also the fourth-largest US domestic intermodal provider with 15,000 privately-owned containers. The agreement allows Axos Financial and Siemens Financial Solutions to proceed as a sub-case within the bankruptcy case in exchange for withdrawing an objection to the rescue funding. If a deal had not been struck, then the bankruptcy judge would have ruled on the objection Tuesday. The final order authorizes STG to pay drivers, warehouse workers, and railroads, among others. STG owed Union Pacific Railroad $13.4 million in back payments, significantly more than the $1.2 million owed to CSX Transportation. In exchange for receiving payment, the railroads cannot change credit terms with STG or increase rates or fees while it remains in Chapter 11 bankruptcy. <h3>Default triggers </h3>Hurdles remain in STG’s efforts to emerge from bankruptcy restructuring. The original bankruptcy filing included a 13-week budget outlining projected revenue from operations and expenses. If STG spends more than 115% of the budgeted expenses, fails to book at least 80% of the estimated revenue, or falls below $50 million in cash on hand, then it will be considered in default. A default doesn’t automatically mean operations would cease, but it gives the lenders the right to stop the cash flow entirely. STG did not fall below the 80% threshold after the recent winter storm briefly disrupted operations on UP and CSX, according to a source close to the bankruptcy hearing. Next month, there will be a window known as a “sale toggle” in which the lenders could decide to sell the company to an outside bidder, who then would decide how to manage STG’s operations. The sale toggle is a standard practice in Chapter 11 bankruptcy allowing the bankrupt company to explore other offers. Finally, the Axos-Siemens case isn’t resolved, just shifted to a sub-case. The bankruptcy judge must still rule before STG emerges from bankruptcy. If the judge rules in favor of Axos and Siemens, the group of rescue lenders could pull their financial support. Contact Ari Ashe at <a href="mailto:ari.ashe@spglobal.com">ari.ashe@spglobal.com</a>. </div>

STG Logistics has received $40 million in new funding and another reserve fund of $25 million after a deal was reached between lenders ahead of a key hearing before a New Jersey bankruptcy court. The deal agreed to on Tuesday results in a temporary truce between two lenders who sued STG Logistics in a New York court and a group of lenders who provided the rescue funds when the bankruptcy was filed on Jan. 12 . STG operates a thriving transloading and drayage business and is also the fourth-largest US domestic intermodal provider with 15,000 privately-owned containers. The agreement allows Axos Financial and Siemens Financial Solutions to proceed as a sub-case within the bankruptcy case in exchange for withdrawing an objection to the rescue funding. If a deal had not been struck, then the bankruptcy judge would have ruled on the objection Tuesday. The final order authorizes STG to pay drivers, warehouse workers, and railroads, among others. STG owed Union Pacific Railroad $13.4 million in back payments, significantly more than the $1.2 million owed to CSX Transportation. In exchange for receiving payment, the railroads cannot change credit terms with STG or increase rates or fees while it remains in Chapter 11 bankruptcy. Default triggers Hurdles remain in STG’s efforts to emerge from bankruptcy restructuring. The original bankruptcy filing included a 13-week budget outlining projected revenue from operations and expenses. If STG spends more than 115% of the budgeted expenses, fails to book at least 80% of the estimated revenue, or falls below $50 million in cash on hand, then it will be considered in default. A default doesn’t automatically mean operations would cease, but it gives the lenders the right to stop the cash flow entirely. STG did not fall below the 80% threshold after the recent winter storm briefly disrupted operations on UP and CSX, according to a source close to the bankruptcy hearing. Next month, there will be a window known as a “sale toggle” in which the lenders could decide to sell the company to an outside bidder, who then would decide how to manage STG’s operations. The sale toggle is a standard practice in Chapter 11 bankruptcy allowing the bankrupt company to explore other offers. Finally, the Axos-Siemens case isn’t resolved, just shifted to a sub-case. The bankruptcy judge must still rule before STG emerges from bankruptcy. If the judge rules in favor of Axos and Siemens, the group of rescue lenders could pull their financial support. Contact Ari Ashe at ari.ashe@spglobal.com .

Rail News

Intermodal providers

STG Logistics survives key bankruptcy hurdle to remain in business

<div class="phx-topic abstract-wrapper">La Caisse, a major infrastructure fund and co-investor with DP World, said it wants clarity from the ports operator about Sultan Ahmed Bin Sulayem’s relationship with the convicted sex trafficker after messages between the two men became public this week.</div>

La Caisse, a major infrastructure fund and co-investor with DP World, said it wants clarity from the ports operator about Sultan Ahmed Bin Sulayem’s relationship with the convicted sex trafficker after messages between the two men became public this week.

<div class="phx-topic">A Quebec-based pension fund has put future investments with DP World on hold until the ports operator clarifies the relationship its chief executive had with deceased sex offender Jeffrey Epstein. The pause could slow development of Canada’s next big container terminal. La Caisse, which has C$496 billion in assets under management, said in a statement to the Journal of Commerce Wednesday it is waiting to hear from DP World about what steps it is taking in regards to its Chairman and Chief Executive Sultan Ahmed Bin Sulayem after messages between him and Epstein were released by US Congressional representatives this week as part of a probe into Epstein’s ties to rich and powerful men across the globe. Some of <a href="https://www.ft.com/content/c813601e-e8cb-4eb9-b1de-6ca504bb689f">the messages between Sulayem and Epstein</a> were sexual in nature. La Caisse, which has invested in DP World port projects across the world, said that until it hears from DP World, it is “pausing additional capital deployment alongside the company.” “It is important to distinguish the company, DP World, from the individual, who is the focus of the current situation,” La Caisse said. “On that point, we have made it clear to the company that we expect it to shed light on the situation and take the necessary actions.” According to local media, La Caisse had been slated to provide over C$100 million toward the development of Quebec’s Contrecoeur terminal, which is estimated to cost about C$1.6 billion and <a href="https://www.joc.com/article/dp-world-to-build-big-ship-container-terminal-in-montreal-6077326">would be operated by DP World</a>. La Caisse said no final decision on financing Contrecoeur has been made. In 2020, DP World and La Caisse acquired the Fraser Surrey terminal at the Port of Vancouver. That was followed by La Caisse investing up to $5 billion in 2022 in DP World’s Jebel Ali port in Dubai, along with a nearby free trade zone and industrial park. Montreal Port Authority (MPA) Chief Executive Julie Gascon said in a statement to the Journal of Commerce that it’s not yet clear whether La Caisse’s pause would affect Contrecoeur’s expected 2030 opening date. The MPA, which is responsible for <a href="https://www.joc.com/article/quebec-provides-new-funding-for-proposed-montreal-terminal-citing-us-trade-tensions-5947783">the separate government-backed financing of dredging and other below-water work at the site</a>, is also waiting to hear from DP World about how it will respond to La Caisse. Gascon said, however, that development of Contrecoeur is a national priority for Prime Minister Mark Carney, <a href="https://www.joc.com/article/canada-looks-for-new-container-gateways-for-decoupling-from-us-6122714">who is looking to grow Canada’s non-US international trade</a>. Contrecoeur will be needed to serve the country’s eastern half as the Port of Montreal will likely be at capacity by the next decade. “My concern is that as soon as we start signing more services, then we’re full,” Gascon said. “So, I can’t come in late with Contrecoeur. It’s 2026, and it’s going to be delivered in 2030, so we need to be on time.” <h3>DP World expanded in US </h3>Dubai-based DP World, the fourth-largest ports operator globally by volume, is Canada’s largest terminal company, operating the Fraser Surrey, Centerm and Nanaimo facilities in Vancouver; the Prince Rupert terminal, and the Port of Saint John container terminal. In the US, DP World has a limited presence in non-marine logistics. Last year, it acquired Unique Logistics International, a North Carolina-based contract logistics provider, and bought Michigan-based warehousing and logistics operator Syncreon in 2021. But DP World is also looking to expand in the US, with the company reported to be one of the potential suitors for the Maher terminal at the Port of New York and New Jersey. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>.  </div>

A Quebec-based pension fund has put future investments with DP World on hold until the ports operator clarifies the relationship its chief executive had with deceased sex offender Jeffrey Epstein. The pause could slow development of Canada’s next big container terminal. La Caisse, which has C$496 billion in assets under management, said in a statement to the Journal of Commerce Wednesday it is waiting to hear from DP World about what steps it is taking in regards to its Chairman and Chief Executive Sultan Ahmed Bin Sulayem after messages between him and Epstein were released by US Congressional representatives this week as part of a probe into Epstein’s ties to rich and powerful men across the globe. Some of the messages between Sulayem and Epstein were sexual in nature. La Caisse, which has invested in DP World port projects across the world, said that until it hears from DP World, it is “pausing additional capital deployment alongside the company.” “It is important to distinguish the company, DP World, from the individual, who is the focus of the current situation,” La Caisse said. “On that point, we have made it clear to the company that we expect it to shed light on the situation and take the necessary actions.” According to local media, La Caisse had been slated to provide over C$100 million toward the development of Quebec’s Contrecoeur terminal, which is estimated to cost about C$1.6 billion and would be operated by DP World . La Caisse said no final decision on financing Contrecoeur has been made. In 2020, DP World and La Caisse acquired the Fraser Surrey terminal at the Port of Vancouver. That was followed by La Caisse investing up to $5 billion in 2022 in DP World’s Jebel Ali port in Dubai, along with a nearby free trade zone and industrial park. Montreal Port Authority (MPA) Chief Executive Julie Gascon said in a statement to the Journal of Commerce that it’s not yet clear whether La Caisse’s pause would affect Contrecoeur’s expected 2030 opening date. The MPA, which is responsible for the separate government-backed financing of dredging and other below-water work at the site , is also waiting to hear from DP World about how it will respond to La Caisse. Gascon said, however, that development of Contrecoeur is a national priority for Prime Minister Mark Carney, who is looking to grow Canada’s non-US international trade . Contrecoeur will be needed to serve the country’s eastern half as the Port of Montreal will likely be at capacity by the next decade. “My concern is that as soon as we start signing more services, then we’re full,” Gascon said. “So, I can’t come in late with Contrecoeur. It’s 2026, and it’s going to be delivered in 2030, so we need to be on time.” DP World expanded in US Dubai-based DP World, the fourth-largest ports operator globally by volume, is Canada’s largest terminal company, operating the Fraser Surrey, Centerm and Nanaimo facilities in Vancouver; the Prince Rupert terminal, and the Port of Saint John container terminal. In the US, DP World has a limited presence in non-marine logistics. Last year, it acquired Unique Logistics International, a North Carolina-based contract logistics provider, and bought Michigan-based warehousing and logistics operator Syncreon in 2021. But DP World is also looking to expand in the US, with the company reported to be one of the potential suitors for the Maher terminal at the Port of New York and New Jersey. Contact Michael Angell at michael.angell@spglobal.com . 

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