<div class="phx-topic abstract-wrapper">Canada is quietly creating an environment for trade diversification.</div>

Canada is quietly creating an environment for trade diversification.

<div>To say there is a certain degree of angst in Canada’s business community with respect to the fate of the North American Free Trade Agreement (NAFTA) would be an understatement. From corporate leaders to small business owners, industry associations and economic observers, those with a stake in Canadian-American trade are waiting with bated breath to learn the outcome of the NAFTA negotiations.In some cases businesses are likely to put on hold investments in continental supply chains and warehousing until they can have greater certainty that they will see a viable return on those investments under the provisions of a new...

To say there is a certain degree of angst in Canada’s business community with respect to the fate of the North American Free Trade Agreement (NAFTA) would be an understatement. From corporate leaders to small business owners, industry associations and economic observers, those with a stake in Canadian-American trade are waiting with bated breath to learn the outcome of the NAFTA negotiations. In some cases businesses are likely to put on hold investments in continental supply chains and warehousing until they can have greater certainty that they will see a viable return on those investments under the provisions of a new NAFTA. While the negotiators themselves continue to publicly state a will to find mutually agreeable ground, one cannot help but notice that Canada is quietly creating an environment for trade diversification. In January, well before the NAFTA negotiations began, the federal government announced exploratory talks for a trade deal with China. More recently, the government has announced its openness to similar talks on free trade with the Association of Southeast Asian Nations (ASEAN), which consists of 10 member countries. This activity adds to the exploratory talks being held with eight Latin American nations, not to mention the Philippines, Thailand and Turkey; as well as already active negotiations with India, Japan, Singapore, Morocco, and nearly the entire Caribbean. Perhaps most noteworthy is the deal Canada has already struck with the European Union in the form of the Comprehensive Economic & Trade Agreement (CETA) , which eliminates 98 percent of tariffs in trade with the European Union. With all the tumult over NAFTA, there is surprisingly little chatter about the fact that CETA will come into effect on September 21, opening up a market of 500 million to Canadian entrepreneurs, many of whom have risk exposure in a potentially less advantageous NAFTA. With protectionist sentiments hitting palpable levels in the United States as they subside in Europe, Canadian businesses whose fates are inherently tied to their ability to trade with the United States would be well served to explore the opportunities available to them through Europe before NAFTA talks wrap up and before competition within the European Union – which recently agreed to a free-trade framework with Japan – really heats up. To be sure, trade with Europe will not be as seamless as it is with the United States. Trans-Atlantic shipping requires air- and sea-cargo considerations and lengthier time in transit. Europe’s linguistic and cultural diversity means special considerations may need to be taken into account with respect to branding and packaging, particularly for consumer products. In some cases, linguistic barriers could stymie efforts to establish vendor and/or supplier partnerships. Finally, because certain aspects of the agreement will not come into effect until CETA is fully ratified by all of the EU states’ various legislative bodies, there is a certain level of risk that comes with heavy investment in proprietary Trans-Atlantic supply chains. Granted, these challenges may seem onerous relative to the ease by which Canadian businesses currently conduct trade with the United States. Yet many entrepreneurs have already overcome these barriers many times over and have found sustained success in Europe well before CETA negotiations even began seven years ago. The EU market is, in fact, larger than the United States and demand for Canadian goods is strong. The elimination of tariffs on most goods means the cost burden of trade is lower and the opportunities greater. This is particularly true for common goods trade, but also trade in services. Also, let us not forget the liberalization of labour laws under CETA that allows for expedited recognition of professional credentials and the accessibility of government procurement contracts that offer highly lucrative opportunities to those who choose to seek them out. For importers, there are countless opportunities to establish new vendor relationships and identify cost-saving opportunities. The reduction or elimination of tariffs, creates valuable prospects for manufacturers to make strategic capital investments that could enhance their productivity and, in turn, competitiveness. As mentioned, the provisional nature of CETA presents a certain level of risk for Canadian businesses. With the fate of the agreement in the hands of Europe’s many legislative bodies, there’s the unlikely possibility the agreement could be cancelled or dramatically altered. There is also the possibility of a hard Brexit by the United Kingdom that would remove the advantages of CETA from trade with that market. Canadian businesses should be prepared to carefully research their prospects in Europe and ensure their supply chains and business models can withstand shifts in regulatory and trade policy. Nevertheless, the prospective benefits of CETA far outweigh any potential risks, particularly in the current climate of insecurity around the fate of NAFTA and the favorability of Canada’s position within it. While trade with the United States will forever be integral to Canada’s international commerce, CETA and the myriad trade deals Canada is currently pursuing offers an unprecedented opportunity for Canadian businesses to break their dependence on NAFTA and collectively achieve greater balance in Canada’s trade relationship with the world. It may be just in time. Candace Sider is the vice president of regulatory affairs of North America for Toronto-based trade services firm Livingston International. She currently sits on the Border Customs Consultative Committee (BCCC) and is also the past chair and a current board member of the Canadian Society of Customs Brokers and managing director and treasurer on the board of the International Federation of Customs Brokers Association.

EU provides Canada alternatives amid NAFTA uncertainty

<div class="phx-topic abstract-wrapper">A cautious approach to investment in network and terminal infrastructure is not keeping pace with market growth.</div>

A cautious approach to investment in network and terminal infrastructure is not keeping pace with market growth.

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<div class="phx-topic">A growing mismatch at North European ocean gateways between available capacity and demand has left deep-sea container terminals struggling with high utilization levels and likely facing years of port bottlenecks. For much of 2025, persistent congestion across the region’s largest ports has delayed ship turnarounds and dragged down schedule reliability. After reaching a 2025 high of 45%, on-time performance on the trade lane in July was a dismal 28%, according to visibility provider eeSea. Congestion in Europe’s ports was likely to be an issue “for a few years,” Maersk CEO Vincent Clerc said <a href="https://www.joc.com/article/high-gemini-reliability-lays-groundwork-for-premium-rate-discussions-maersk-ceo-6059343">during a second quarter earnings call with analysts</a> last week. “There is a general undercapacity in ports in Europe where we're starting to feel more and more points of congestions that are impeding the networks,” he explained. “This is the result of terminal capacity being added over the last 15, 20 years at a slower pace than the market has been growing.” Clerc said Maersk was significantly expanding its terminal capacity in Rotterdam and was about to open a terminal in Croatia. ”There’s some definite points where we’re looking at expanding and others are doing something similar, but it will take time for all of that to come online,” he said. Europe’s second busiest container port of Antwerp-Bruges highlighted the lack of space in its first half results in July, noting that <a href="https://www.joc.com/article/strong-h1-volumes-space-crunch-keep-antwerp-terminals-under-pressure-6043917">marine terminals were under “heavy strain”</a> with landside space at critically low levels. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="7041fe54-edf1-4d59-9d82-94781e7a7eb1"></dynamic-object></div>On top of the terminal undercapacity, several other factors are adding to the bottlenecks. Europe’s hub ports across the Northern Range have seen carriers shift towards deploying larger vessels on mainline Asia–North Europe routes, increasing the average container exchange and generating higher cargo peaks at terminal yards. Disruption on the maritime leg of voyages, such as making greater use of blank sailings to manage capacity and taking a longer route around southern Africa to avoid the Red Sea also has an impact yard operations. <h3>Landside capacity restricted </h3>Another contributing factor to the congestion is restricted landside transport capacity with low water levels on the Rhine limiting barge capacity and poor rail capacity and reliability. “Modal shift initiatives (such as road) will likely put further pressure on landside transport linkages, but perhaps there needs to be a period of demand push to activate the required investments to improve the intermodal connectivity at key ports,” Eleanor Hadland, senior associate for ports and terminals at Drewry, told the Journal of Commerce Tuesday. The ongoing port congestion is absorbing a significant amount of Asia–Europe capacity deployed on the trade lane, constraining capacity by extending vessel turnaround times and reducing effective service frequency, according to C.H. Robinson. Instead of a typical two-or three-day port stay, vessels were now hanging around longer due to berth delays and slower cargo handling, the forwarder wrote in an August market update. ”This means a ship that normally completes 12 round trips per year can now complete only eight or nine trips, reducing the total shipping capacity available to the market by roughly 25%-30%,” C.H. Robinson noted. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="eebb48eb-ad03-4e0f-a647-67693692edb4"></dynamic-object></div>Michael Aldwell, executive vice president of sea logistics at Kuehne + Nagel, said capacity reduction has been between 15% and 20% on both Asia-North Europe and Asia-Mediterranean for the last two months. “The reduction in capacity is a combination of where there are still not enough vessels to entirely cover the Cape of Good Hope routing, the replacement of larger vessels with smaller ones (on the trans-Pacific eastbound and Africa trade), and the European port congestion, which started in February and which indeed does not show sign of improvement,” Aldwell told the Journal of Commerce. The congestion in European gateways could be different by terminal of the same port and by carrier, and even within the same alliance, he said. “What K+N does to circumvent the unpredictable and uncontrollable European port congestion is to work with collect on delivery (COD) or with dynamic ETA planning, depending on customer preference and needs.” Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

A growing mismatch at North European ocean gateways between available capacity and demand has left deep-sea container terminals struggling with high utilization levels and likely facing years of port bottlenecks. For much of 2025, persistent congestion across the region’s largest ports has delayed ship turnarounds and dragged down schedule reliability. After reaching a 2025 high of 45%, on-time performance on the trade lane in July was a dismal 28%, according to visibility provider eeSea. Congestion in Europe’s ports was likely to be an issue “for a few years,” Maersk CEO Vincent Clerc said during a second quarter earnings call with analysts last week. “There is a general undercapacity in ports in Europe where we're starting to feel more and more points of congestions that are impeding the networks,” he explained. “This is the result of terminal capacity being added over the last 15, 20 years at a slower pace than the market has been growing.” Clerc said Maersk was significantly expanding its terminal capacity in Rotterdam and was about to open a terminal in Croatia. ”There’s some definite points where we’re looking at expanding and others are doing something similar, but it will take time for all of that to come online,” he said. Europe’s second busiest container port of Antwerp-Bruges highlighted the lack of space in its first half results in July, noting that marine terminals were under “heavy strain” with landside space at critically low levels. On top of the terminal undercapacity, several other factors are adding to the bottlenecks. Europe’s hub ports across the Northern Range have seen carriers shift towards deploying larger vessels on mainline Asia–North Europe routes, increasing the average container exchange and generating higher cargo peaks at terminal yards. Disruption on the maritime leg of voyages, such as making greater use of blank sailings to manage capacity and taking a longer route around southern Africa to avoid the Red Sea also has an impact yard operations. Landside capacity restricted Another contributing factor to the congestion is restricted landside transport capacity with low water levels on the Rhine limiting barge capacity and poor rail capacity and reliability. “Modal shift initiatives (such as road) will likely put further pressure on landside transport linkages, but perhaps there needs to be a period of demand push to activate the required investments to improve the intermodal connectivity at key ports,” Eleanor Hadland, senior associate for ports and terminals at Drewry, told the Journal of Commerce Tuesday. The ongoing port congestion is absorbing a significant amount of Asia–Europe capacity deployed on the trade lane, constraining capacity by extending vessel turnaround times and reducing effective service frequency, according to C.H. Robinson. Instead of a typical two-or three-day port stay, vessels were now hanging around longer due to berth delays and slower cargo handling, the forwarder wrote in an August market update. ”This means a ship that normally completes 12 round trips per year can now complete only eight or nine trips, reducing the total shipping capacity available to the market by roughly 25%-30%,” C.H. Robinson noted. Michael Aldwell, executive vice president of sea logistics at Kuehne + Nagel, said capacity reduction has been between 15% and 20% on both Asia-North Europe and Asia-Mediterranean for the last two months. “The reduction in capacity is a combination of where there are still not enough vessels to entirely cover the Cape of Good Hope routing, the replacement of larger vessels with smaller ones (on the trans-Pacific eastbound and Africa trade), and the European port congestion, which started in February and which indeed does not show sign of improvement,” Aldwell told the Journal of Commerce. The congestion in European gateways could be different by terminal of the same port and by carrier, and even within the same alliance, he said. “What K+N does to circumvent the unpredictable and uncontrollable European port congestion is to work with collect on delivery (COD) or with dynamic ETA planning, depending on customer preference and needs.” Contact Greg Knowler at greg.knowler@spglobal.com .

Maritime

Port News

Port infrastructure

Marine terminals

International ports

Underinvestment exposes European ports to systematic bottlenecks

<div class="phx-topic abstract-wrapper">The fifth-largest freight broker in the US will absorb FreightSaver, which, similar to Echo, focuses on managed transportation services for shippers. </div>

The fifth-largest freight broker in the US will absorb FreightSaver, which, similar to Echo, focuses on managed transportation services for shippers.

<div class="phx-topic">Freight broker Echo Global Logistics on Monday acquired Southern California-based third-party logistics (3PL) provider FreightSaver for an undisclosed sum, broadening Echo’s West Coast and Midwest presence amid a long-term malaise in the US domestic freight market. The deal will see Echo incorporate FreightSaver’s offices in Utah, Michigan, Ohio, and California. Founded in 2014 by logistics veterans Ryan Renne and Buster Schwab, FreightSaver offers truckload, less-than-truckload (LTL), expedited, specialized freight and managed transportation services. “FreightSaver has built a customer-centric, tech-enabled business that complements our strengths and accelerates our ability to deliver value through managed transportation,“ Echo CEO Doug Waggoner said in a statement. Echo is the fifth-largest US freight broker, with approximately $3 billion in revenue in 2024, according to analyst Armstrong &amp; Associates. It was <a href="https://www.joc.com/article/echo-deal-pushes-private-equity-deeper-into-logistics-5248085">taken private in 2021</a> by private equity group The Jordan Company in a $1.3 billion transaction. Merger and acquisition activity in the brokerage market has slowed since a feverish period in the pandemic, culminating in <a href="https://www.joc.com/article/rxo-purchase-of-coyote-logistics-highlights-us-brokerage-market-pressures-5192296">RXO’s $1 billion purchase of Coyote Logistics</a> in June 2024. <a href="https://www.joc.com/article/jb-hunt-brokerage-acquisition-deepens-partnership-with-bnsf-5215664">J.B. Hunt acquired BNSF Logistics’ brokerage division</a> in June 2023, while <a href="https://www.joc.com/article/uber-freight-to-buy-transplace-for-225-billion-5249247">Uber Freight acquired Transplace</a> and <a href="https://www.joc.com/article/molo-wants-to-catch-ch-robinson-via-arcbest-ramp-5247241">ArcBest Acquired MoLo Solutions</a> in 2021. Both truckload and LTL pricing have been under long-term pressure, due in part to overcapacity in the truckload market and diminished demand in the LTL market. Brokers are also <a href="https://www.joc.com/article/truckload-brokers-eye-human-technology-balance-as-ai-takes-hold-5876340">under pressure to use technology</a> — and, in particular, automation — to be more operationally efficient to preserve margin amid that low rate environment. “Echo brings the scale, resources, and vision to expand the value we deliver to our clients,” Schwab, FreightSaver’s president, said in the statement. “Together, we’re positioned to deliver smarter logistics with a powerful combination of people and technology.” Contact Eric Johnson at <a href="mailto:eric.johnson@spglobal.com">eric.johnson@spglobal.com</a>. </div>

Freight broker Echo Global Logistics on Monday acquired Southern California-based third-party logistics (3PL) provider FreightSaver for an undisclosed sum, broadening Echo’s West Coast and Midwest presence amid a long-term malaise in the US domestic freight market. The deal will see Echo incorporate FreightSaver’s offices in Utah, Michigan, Ohio, and California. Founded in 2014 by logistics veterans Ryan Renne and Buster Schwab, FreightSaver offers truckload, less-than-truckload (LTL), expedited, specialized freight and managed transportation services. “FreightSaver has built a customer-centric, tech-enabled business that complements our strengths and accelerates our ability to deliver value through managed transportation,“ Echo CEO Doug Waggoner said in a statement. Echo is the fifth-largest US freight broker, with approximately $3 billion in revenue in 2024, according to analyst Armstrong & Associates. It was taken private in 2021 by private equity group The Jordan Company in a $1.3 billion transaction. Merger and acquisition activity in the brokerage market has slowed since a feverish period in the pandemic, culminating in RXO’s $1 billion purchase of Coyote Logistics in June 2024. J.B. Hunt acquired BNSF Logistics’ brokerage division in June 2023, while Uber Freight acquired Transplace and ArcBest Acquired MoLo Solutions in 2021. Both truckload and LTL pricing have been under long-term pressure, due in part to overcapacity in the truckload market and diminished demand in the LTL market. Brokers are also under pressure to use technology — and, in particular, automation — to be more operationally efficient to preserve margin amid that low rate environment. “Echo brings the scale, resources, and vision to expand the value we deliver to our clients,” Schwab, FreightSaver’s president, said in the statement. “Together, we’re positioned to deliver smarter logistics with a powerful combination of people and technology.” Contact Eric Johnson at eric.johnson@spglobal.com .

Surface

Trucking News

Truck brokers

Echo acquires California 3PL amid flagging US freight market

<div class="phx-topic abstract-wrapper">Taiwan-based ocean carriers say US tariffs are taking a toll on trans-Pacific volumes.</div>

Taiwan-based ocean carriers say US tariffs are taking a toll on trans-Pacific volumes.

<div class="phx-topic">Two of Taiwan’s big three carriers, Yang Ming Marine Transport and Wan Hai Lines, saw a second-quarter net profit slump due to weaker cargo volumes amid uncertainty over ongoing trade negotiations. Yang Ming’s second-quarter profitability was also hit by a tax on undistributed earnings, the carrier said in a statement announcing its results Tuesday. Analysts estimated the tax liability at about $100 million based on pre-tax figures in previous quarters. Commenting on current market conditions, Yang Ming said there are wide variations across different trade lanes. The trans-Pacific has been negatively impacted by uncertainty over US tariffs, despite the traditional summer peak season, the carrier said in the results statement. Asia-Europe and Asia-Mediterranean trades are expected to remain positive. Intra-Asia demand is steady, whereas Asia-Australia, Asia-Latin America, and other segments require close monitoring for market volatility, Yang Ming said. Vessel diversions via the Cape of Good Hope are partially absorbing excess container ship capacity, which is expected grow 6% this year, the carrier said quoting Drewry and Alphaliner figures. Drewry is forecasting demand growth of 2%, while Alphaliner is estimating 2.7% growth, Yang Ming added. “Drewry also foresees softer market conditions in the second half due to front-loaded shipments in the first half,” Yang Ming’s statement added. Yang Ming, Taiwan’s second-largest carrier behind Evergreen and ranked 10th largest globally by Alphaliner, saw net profit slump to $31 million in the second quarter, down from $259 million in the first quarter and $436 million in the second quarter last year. Second-quarter revenues dropped 27% to $1.2 billion from $1.7 billion in the year prior. Figures show revenues also fell 16% quarter over quarter from $1.4 billion in the first quarter. Separately, intra-Asia-focused Wan Hai Lines also saw second-quarter net profit slump to $41 million compared with $286 million in the first quarter and $142 million in the second quarter last year, based on an analysis of a Taiwan stock exchange filing Monday. Quarter-over-quarter revenue was unchanged at $1.2 billion, although second quarter revenue increased 9% compared with $1.1 billion in the prior year. Evergreen will file its interim results with the Taiwan stock exchange Wednesday. Contact Keith Wallis at <a href="mailto:keithwallis@hotmail.com">keithwallis@hotmail.com</a>. </div>

Two of Taiwan’s big three carriers, Yang Ming Marine Transport and Wan Hai Lines, saw a second-quarter net profit slump due to weaker cargo volumes amid uncertainty over ongoing trade negotiations. Yang Ming’s second-quarter profitability was also hit by a tax on undistributed earnings, the carrier said in a statement announcing its results Tuesday. Analysts estimated the tax liability at about $100 million based on pre-tax figures in previous quarters. Commenting on current market conditions, Yang Ming said there are wide variations across different trade lanes. The trans-Pacific has been negatively impacted by uncertainty over US tariffs, despite the traditional summer peak season, the carrier said in the results statement. Asia-Europe and Asia-Mediterranean trades are expected to remain positive. Intra-Asia demand is steady, whereas Asia-Australia, Asia-Latin America, and other segments require close monitoring for market volatility, Yang Ming said. Vessel diversions via the Cape of Good Hope are partially absorbing excess container ship capacity, which is expected grow 6% this year, the carrier said quoting Drewry and Alphaliner figures. Drewry is forecasting demand growth of 2%, while Alphaliner is estimating 2.7% growth, Yang Ming added. “Drewry also foresees softer market conditions in the second half due to front-loaded shipments in the first half,” Yang Ming’s statement added. Yang Ming, Taiwan’s second-largest carrier behind Evergreen and ranked 10th largest globally by Alphaliner, saw net profit slump to $31 million in the second quarter, down from $259 million in the first quarter and $436 million in the second quarter last year. Second-quarter revenues dropped 27% to $1.2 billion from $1.7 billion in the year prior. Figures show revenues also fell 16% quarter over quarter from $1.4 billion in the first quarter. Separately, intra-Asia-focused Wan Hai Lines also saw second-quarter net profit slump to $41 million compared with $286 million in the first quarter and $142 million in the second quarter last year, based on an analysis of a Taiwan stock exchange filing Monday. Quarter-over-quarter revenue was unchanged at $1.2 billion, although second quarter revenue increased 9% compared with $1.1 billion in the prior year. Evergreen will file its interim results with the Taiwan stock exchange Wednesday. Contact Keith Wallis at keithwallis@hotmail.com .

Container Shipping News

Container lines

Yang Ming, Wan Hai profits drop on weaker volumes

<div class="phx-topic abstract-wrapper">US tariffs are fuel cost-cutting mandates, heaping pressure on cargo owners to push for lower ocean shipping rates even if at the expense of carrier relations. </div>

US tariffs are fuel cost-cutting mandates, heaping pressure on cargo owners to push for lower ocean shipping rates even if at the expense of carrier relations.

<div class="phx-topic">A combination of factors that includes shippers’ hunger to lower costs in the face of the highest US tariffs in decades and a growing supply-demand imbalance are raising the specter of worsening shipper-carrier relations. In the near term, shippers operating under strict cost-cutting mandates could, for example, begin diverting contracted cargo to a lower-priced spot market. In the long term, this dynamic could result in shippers walking away from established carrier and forwarder partnerships in pursuit of marginally lower rates. “The pressure is immense already,” Mark Chadwick, president of the Global Shippers Association, told the Journal of Commerce. “With margins squeezed because of tariffs and nearshoring expenses, many CFOs are pushing their procurement teams to lower other costs, with logistics certainly on the list.” M. Can Fidan, executive vice president at forwarder MTS Logistics, said some shippers are still motivated in part by the record rates seen during the COVID-19 pandemic. “[Some] importers are always looking for lower prices, but I think now they have the appetite to push carriers, or maybe to switch to other carriers, after experiencing what they saw as unfair price increases during COVID-19 from longstanding carrier partners,” Fidan said. Those opportunities to drive down costs may well present themselves; analysts expect new vessel arrivals to tip the market into overcapacity next year, despite factors such as Red Sea diversions, port congestion in Asia and Europe, and alliance reshuffling that worked in carriers’ favor this year. JP Morgan said on Aug. 11 that “steep losses into 2026–27 [are] unavoidable” for Maersk, reflecting a deteriorating freight rate environment for the wider industry. It’s a familiar dynamic in container shipping. One party takes advantage of favorable market forces but in doing so sets itself up for future retaliation when the market turns against them. “The same bosses who are demanding a 10% reduction in your ocean spend now are the ones who are going to be screaming when you can’t get space on a ship,” Chadwick said. “There are many companies for whom air cargo is not a viable alternative, so if they can’t get access to ocean freight, it could be game over.” Shippers will no doubt recall that, in tight markets over the five-plus years since the beginning of the pandemic, carriers sought to maximize revenue, leaving lower-priced yet contracted cargo behind, improving their profitability but hurting customers’ supply chains in the process. They will remember how carriers aggressively use blank sailings and other capacity-restricting tools to support the market, the effect of which for shippers is longer transit times, higher inventory costs and revenue impact. “Even if you tell a customer today, ‘You know this x carrier took care of us during that time,’ they’ll say, ‘Yeah, I know, but they didn’t do it because they love me. They do it because I paid them the highest rate, right? So now, why do I need to support them when they need me?,’” Fidan said. <h3>History, repeated </h3>Shippers, for their part, had the opportunity to turn the tables in 2022 and 2024, when the market collapsed, and they are poised to do it again. Trans-Pacific spot rates have plunged more than 70% to the West Coast and 61% to the East Coast since mid-June, when China cargo was unleashed after the temporary easing of 145% tariffs. There are early signs that cost pressures are leading some shippers to seek out lower spot rates, even when failing to fulfill contracted minimum quantity commitments (MQCs). In other words, market forces may yet again overwhelm relationships, partnerships and any semblance of win-win value creation in the container supply chain. Even some shippers are warning that overly aggressive cost-cutting could come back to bite them when the market tightens. This is seen as inevitable given the current environment, characterized by repeated capacity shocks due to external forces and a consolidated carrier industry ready to take advantage. “It’s important for shippers to avoid the temptation of compromising commitments to their carrier partners in exchange for these relatively small, short-term gains,” Chadwick said. “Given the turmoil in international trade, some shippers won’t have the volume to meet their MQCs and should be upfront with the carriers about this, so that they can plan space utilization accordingly. But it’s a different story when that MQC’s missed because the shipper’s chasing an off contract alternative that’s slightly lower cost. “We need to protect the goodwill that we’ve been earning with the carriers, standing by our commitments so that we can expect the same when the market flips again,” he added. <h3>Lessons learned? </h3>But market forces will, as they have many times in the past, exert powerful pressures that undermine partnership. These include the intense margin pressure shippers are under when attempting to mitigate the impact of US tariffs, which are above 18% now on average, up from 2.4% last year and the highest level since the 1930s. Those pressures also include the wave of new vessels currently being delivered to carriers that will result in increasingly attractive rates being shopped to beneficial cargo owners. “We expect [rates] to continue to decline on a widening demand-supply imbalance,” JP Morgan wrote following Maersk’s second-quarter earnings report on Aug. 7. Chadwick said carriers are already floating “low-ball offers,” and this trend will likely accelerate through the end of 2025 and into 2026 as carriers and forwarders look to maintain volumes. “We know to expect the unexpected, so a lot could happen that could quickly reverse this trend, another reason to stay focused on being good partners to our carriers,” he said. Shippers will try different tactics to get away with shipping under lower spot rates while preserving carrier relationships, an increasingly important priority for them given there are fewer carriers available due to consolidation. They will argue, for example, that manufacturing or other delays prevent them fulfilling MQCs, an excuse carriers may accept to the extent the market is weak, and the carrier itself wants to preserve the relationship with the shipper in the upcoming contract cycle. A question hanging over the market is how much carriers learned over the past five years to maximize their advantage, specifically about limiting capacity in various ways when facing soft market conditions, or whether carriers will return to predatory practices of raiding each other’s cargo base just to fill their ships. “For the next few months, you will see carriers blanking capacity because I do think they realize the party is over and they brought in too much capacity this spring,” said Sanjay Tejwani, CEO of consulting firm 365 Logistics. “But that said, they have been pretty good in reacting, and they will react again, pulling capacity out and creating a stable market. Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

A combination of factors that includes shippers’ hunger to lower costs in the face of the highest US tariffs in decades and a growing supply-demand imbalance are raising the specter of worsening shipper-carrier relations. In the near term, shippers operating under strict cost-cutting mandates could, for example, begin diverting contracted cargo to a lower-priced spot market. In the long term, this dynamic could result in shippers walking away from established carrier and forwarder partnerships in pursuit of marginally lower rates. “The pressure is immense already,” Mark Chadwick, president of the Global Shippers Association, told the Journal of Commerce. “With margins squeezed because of tariffs and nearshoring expenses, many CFOs are pushing their procurement teams to lower other costs, with logistics certainly on the list.” M. Can Fidan, executive vice president at forwarder MTS Logistics, said some shippers are still motivated in part by the record rates seen during the COVID-19 pandemic. “[Some] importers are always looking for lower prices, but I think now they have the appetite to push carriers, or maybe to switch to other carriers, after experiencing what they saw as unfair price increases during COVID-19 from longstanding carrier partners,” Fidan said. Those opportunities to drive down costs may well present themselves; analysts expect new vessel arrivals to tip the market into overcapacity next year, despite factors such as Red Sea diversions, port congestion in Asia and Europe, and alliance reshuffling that worked in carriers’ favor this year. JP Morgan said on Aug. 11 that “steep losses into 2026–27 [are] unavoidable” for Maersk, reflecting a deteriorating freight rate environment for the wider industry. It’s a familiar dynamic in container shipping. One party takes advantage of favorable market forces but in doing so sets itself up for future retaliation when the market turns against them. “The same bosses who are demanding a 10% reduction in your ocean spend now are the ones who are going to be screaming when you can’t get space on a ship,” Chadwick said. “There are many companies for whom air cargo is not a viable alternative, so if they can’t get access to ocean freight, it could be game over.” Shippers will no doubt recall that, in tight markets over the five-plus years since the beginning of the pandemic, carriers sought to maximize revenue, leaving lower-priced yet contracted cargo behind, improving their profitability but hurting customers’ supply chains in the process. They will remember how carriers aggressively use blank sailings and other capacity-restricting tools to support the market, the effect of which for shippers is longer transit times, higher inventory costs and revenue impact. “Even if you tell a customer today, ‘You know this x carrier took care of us during that time,’ they’ll say, ‘Yeah, I know, but they didn’t do it because they love me. They do it because I paid them the highest rate, right? So now, why do I need to support them when they need me?,’” Fidan said. History, repeated Shippers, for their part, had the opportunity to turn the tables in 2022 and 2024, when the market collapsed, and they are poised to do it again. Trans-Pacific spot rates have plunged more than 70% to the West Coast and 61% to the East Coast since mid-June, when China cargo was unleashed after the temporary easing of 145% tariffs. There are early signs that cost pressures are leading some shippers to seek out lower spot rates, even when failing to fulfill contracted minimum quantity commitments (MQCs). In other words, market forces may yet again overwhelm relationships, partnerships and any semblance of win-win value creation in the container supply chain. Even some shippers are warning that overly aggressive cost-cutting could come back to bite them when the market tightens. This is seen as inevitable given the current environment, characterized by repeated capacity shocks due to external forces and a consolidated carrier industry ready to take advantage. “It’s important for shippers to avoid the temptation of compromising commitments to their carrier partners in exchange for these relatively small, short-term gains,” Chadwick said. “Given the turmoil in international trade, some shippers won’t have the volume to meet their MQCs and should be upfront with the carriers about this, so that they can plan space utilization accordingly. But it’s a different story when that MQC’s missed because the shipper’s chasing an off contract alternative that’s slightly lower cost. “We need to protect the goodwill that we’ve been earning with the carriers, standing by our commitments so that we can expect the same when the market flips again,” he added. Lessons learned? But market forces will, as they have many times in the past, exert powerful pressures that undermine partnership. These include the intense margin pressure shippers are under when attempting to mitigate the impact of US tariffs, which are above 18% now on average, up from 2.4% last year and the highest level since the 1930s. Those pressures also include the wave of new vessels currently being delivered to carriers that will result in increasingly attractive rates being shopped to beneficial cargo owners. “We expect [rates] to continue to decline on a widening demand-supply imbalance,” JP Morgan wrote following Maersk’s second-quarter earnings report on Aug. 7. Chadwick said carriers are already floating “low-ball offers,” and this trend will likely accelerate through the end of 2025 and into 2026 as carriers and forwarders look to maintain volumes. “We know to expect the unexpected, so a lot could happen that could quickly reverse this trend, another reason to stay focused on being good partners to our carriers,” he said. Shippers will try different tactics to get away with shipping under lower spot rates while preserving carrier relationships, an increasingly important priority for them given there are fewer carriers available due to consolidation. They will argue, for example, that manufacturing or other delays prevent them fulfilling MQCs, an excuse carriers may accept to the extent the market is weak, and the carrier itself wants to preserve the relationship with the shipper in the upcoming contract cycle. A question hanging over the market is how much carriers learned over the past five years to maximize their advantage, specifically about limiting capacity in various ways when facing soft market conditions, or whether carriers will return to predatory practices of raiding each other’s cargo base just to fill their ships. “For the next few months, you will see carriers blanking capacity because I do think they realize the party is over and they brought in too much capacity this spring,” said Sanjay Tejwani, CEO of consulting firm 365 Logistics. “But that said, they have been pretty good in reacting, and they will react again, pulling capacity out and creating a stable market. Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Transport, Trade and Regulation News

Shipper cost pressures risk further fraying carrier relationships

<div class="phx-topic abstract-wrapper">OOCL’s newest express shuttle service from China to Mexico joins other carrier services linking the two and underscores the ongoing growth in trade between the two countries. </div>

OOCL’s newest express shuttle service from China to Mexico joins other carrier services linking the two and underscores the ongoing growth in trade between the two countries.

<div class="phx-topic">Orient Overseas Container Line (OOCL) later this month will begin offering a trans-Pacific express service to Mexico’s West Coast, adding to the list of new ocean services that have sprung up as China reorients its trade networks. OOCL said Monday that its Trans-Pacific Latin Pacific 8 (TLP8) service will start with an Aug. 20 departure from Shanghai. The TLP8’s Asia rotation covers Shanghai and Qingdao, and the eastbound voyage includes Mexico’s Ensenada and Manzanillo, along with a westbound call at Yokohama. The TLP8 is offering 17-day transit between Qingdao and Ensenada. The Port of Ensenada has one berth capable of handling post-Panamax ships up to 6,000 TEUs in capacity. The TLP8 joins three other OOCL trans-Pacific services that connect Mexico, along with the West Coast of South America, to Asia. OOCL added its last Asia-Mexico-South America service, TLP5, back in May 2024. Last year also saw <a href="https://www.joc.com/article/msc-adds-to-growing-asia-mexico-service-launches-5192264">Mediterranean Shipping Co. and CMA CGM add new trans-Pacific services between Asia, Mexico and South America</a>. Mexico saw a surge of foreign direct investment last year from China, reaching $710 million, according to Mexico’s economic secretary. Mexico imported $129 billion worth of goods from China in 2024, according to data from the country’s economy secretary, the highest in two decades. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Orient Overseas Container Line (OOCL) later this month will begin offering a trans-Pacific express service to Mexico’s West Coast, adding to the list of new ocean services that have sprung up as China reorients its trade networks. OOCL said Monday that its Trans-Pacific Latin Pacific 8 (TLP8) service will start with an Aug. 20 departure from Shanghai. The TLP8’s Asia rotation covers Shanghai and Qingdao, and the eastbound voyage includes Mexico’s Ensenada and Manzanillo, along with a westbound call at Yokohama. The TLP8 is offering 17-day transit between Qingdao and Ensenada. The Port of Ensenada has one berth capable of handling post-Panamax ships up to 6,000 TEUs in capacity. The TLP8 joins three other OOCL trans-Pacific services that connect Mexico, along with the West Coast of South America, to Asia. OOCL added its last Asia-Mexico-South America service, TLP5, back in May 2024. Last year also saw Mediterranean Shipping Co. and CMA CGM add new trans-Pacific services between Asia, Mexico and South America . Mexico saw a surge of foreign direct investment last year from China, reaching $710 million, according to Mexico’s economic secretary. Mexico imported $129 billion worth of goods from China in 2024, according to data from the country’s economy secretary, the highest in two decades. Contact Michael Angell at michael.angell@spglobal.com .

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OOCL adds service to tap China-to-Mexico trade boom

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

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