<div class="phx-topic abstract-wrapper">Going into 2020, chassis providers in the US are hopeful that fleet upgrades over the last two years have made the network more resilient, while also acknowledging that there is still little they can do to absorb sudden, unanticipated spikes in cargo.</div>

Going into 2020, chassis providers in the US are hopeful that fleet upgrades over the last two years have made the network more resilient, while also acknowledging that there is still little they can do to absorb sudden, unanticipated spikes in cargo.

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<div>This story appeared in the print edition of the Jan. 6, 2020, Journal of Commerce Annual Review and Outlook.Following a shortage in January caused by front-loading of imports to avoid escalating tariffs, chassis providers at ports across the United States reported little to no disruption to equipment supply throughout 2019.This was largely a byproduct of lower cargo volumes in the ports of Los Angeles and Long Beach and manageable single-digit growth on the East Coast, but going into 2020, chassis providers are hopeful that fleet upgrades over the last two years have made the network more resilient. Chassis providers, however,...

This story appeared in the print edition of the Jan. 6, 2020, Journal of Commerce Annual Review and Outlook. Following a shortage in January caused by front-loading of imports to avoid escalating tariffs, chassis providers at ports across the United States reported little to no disruption to equipment supply throughout 2019. This was largely a byproduct of lower cargo volumes in the ports of Los Angeles and Long Beach and manageable single-digit growth on the East Coast, but going into 2020, chassis providers are hopeful that fleet upgrades over the last two years have made the network more resilient. Chassis providers, however, also acknowledge there is little they can do to absorb a sudden, unanticipated double-digit percentage spike in cargo — as happened in January 2019 — without running into equipment shortages. Some chassis providers, such as Direct ChassisLink Inc. (DCLI) and TRAC Intermodal, bought new chassis in 2019, but for the most part, equipment providers were more likely to refurbish existing chassis due to increased US import tariffs on Chinese goods. Although there are North American manufacturers, the majority of newly purchased 20-foot, 40-foot, and 45-foot chassis are built by China International Marine Containers (CIMC) and imported from China. With a 25 percent tariff on this equipment, which can total more than $10,000 per unit, many chassis providers chose to lean toward the less expensive refurbishment. The North American Chassis Pool Cooperative (NACPC), for example, made very few orders in 2019, while most other pools reduced their order counts from prior years. By refurbishing the oldest and most chronically broken units — installing LED lights, anti-lock brakes, and radial tires — chassis providers also aim to reduce the percentage of chassis out of service. Location, location, location Some providers argue there are enough chassis in use to handle volume crunches, but due to the often unpredictable nature of cargo flows, they’re rarely where they need to be. In other words, it’s not an issue of supply, but one of matching that supply with the market in need. “There are attempts to develop better data sharing to anticipate issues in advance. But if you don’t have five or six weeks of lead time, it’s hard to reposition enough chassis from one market to another to handle a spike,” said Dave Manning, chairman of the NACPC. He explains that a truck is necessary to reposition chassis. Each truck can move four to five chassis. To move 1,200 chassis, for example, requires as many as 300 available trucks, often on very short notice. Because there is a correlation between import surges and truck demand, available drivers and capacity is harder to come by even without the sudden need to reposition chassis from one market to another. “There is a lot of work on information sharing for forecasting, but I don’t think it’s a well-oiled machine yet,” Manning said. TRAC Intermodal CEO Jennifer Polli agreed that some customers are better than others in terms of sharing volume data, but it’s trending in the right direction. She said if ocean carriers were to share ship manifests prior to departure from Asia, equipment providers could plan for vessel arrivals in the US more easily. If, for example, TRAC knew how many CMA CGM or APL containers were due to land in Los Angeles on a given vessel and how many were going inland to Chicago or Memphis, it could position chassis accordingly. Class I railroads also provide information to chassis providers on what containers are on which trains. “I think we get decent volume information. Is it perfect? No. Will it ever be perfect? I don’t know. But the turn times [the number of days a BCO holds onto a chassis] are very difficult to predict, even with historical data,” Polli said. Complicating matters, containers traveling inland via an off-dock rail facility require a chassis for the drayage move to the rail terminal, while those using on-dock rail do not require a chassis, noted Ron Joseph, chief operating officer of DCLI. “Let’s say a vessel is going into Los Angeles. We may know when it’s leaving China that there are 800 containers on the vessel. But what we don’t know is how many are using on-dock rail and how many are not until later [once the vessel is already at sea],” Joseph told JOC. “In some cases, not every rail container will move on on-dock rail. Some will be sent to [BNSF Railway] Hobart or [Union Pacific Railroad] ICTF, which then requires a chassis.” This is of particular concern in the Port of Virginia, where Norfolk International Terminals’ on-dock terminal serves only Norfolk Southern Railway on dock, not CSX Transportation, while the Virginia International Gateway’s on-dock facility serves both Class I railroads. The Virginia Port Authority schedules vessels with many CSX containers to use VIG, but vessels arrive late and can be bumped to NIT to avoid bunching. When this happens, CSX containers must be drayed from NIT to VIG on a chassis. Ultimately, Manning and Polli agreed that even as forecasts improve in 2020, there will likely still be gaps in equipment supply during peak volume periods. In the short term, little is expected to change in markets that experience chronic shortages. A group of truckers and beneficial cargo owners (BCOs) has pushed for a single interoperable pool in Memphis, for example, and ocean carriers and railroads gave their approval, but TRAC and DCLI want to maintain private pools and interoperable pools. The coalition of truckers and BCOs believe a gray pool would eliminate outages similar to the one in January 2019. “In Memphis, we had triple the volume within a two-week period,” countered Polli. “Were there issues in January? Yes. But I don’t know if it would have been eased if there were a single gray pool.” She also said there are no additional agreements with DCLI on interoperability in the works. In July 2019, TRAC and DCLI signed a deal at the behest of BNSF that allowed each to tap into the other’s private pool to prevent a chassis outage in Dallas. Polli said there are no discussions to extend this agreement to other BNSF locations in Memphis, Chicago, or elsewhere, or to any other Class I railroad terminal in the eastern US. Contact Ari Ashe at ari.ashe@ihsmarkit.com and follow him on Twitter: @arijashe .

Rail News

Drayage

Truckload

ARO 2020: Chassis providers hope fleet upgrades make for smooth sailing

<div class="phx-topic abstract-wrapper">It has become difficult, if not impossible, for Los Angeles-Long Beach terminals wishing to automate to gain the necessary approvals from port commissions, despite the terminals’ right to automate being guaranteed since 2008. </div>

It has become difficult, if not impossible, for Los Angeles-Long Beach terminals wishing to automate to gain the necessary approvals from port commissions, despite the terminals’ right to automate being guaranteed since 2008.

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<div class="phx-topic">An article of faith for nearly two decades — that marine terminals along the US West Coast have the right to automate and thereby increase capacity despite limited port land to physically expand — is under threat in Southern California. It has become difficult, if not impossible, for terminals wishing to automate to gain the necessary approvals from port commissions to proceed. This is despite the terminals’ right to automate being guaranteed since 2008 in the collective bargaining agreement between the International Longshore and Warehouse Union (ILWU) and employers represented by the Pacific Maritime Association (PMA). <div class="wrapper-narrow float-right-element"><img src="/images/phoenix/6199901_0.1.jpg"></img></div>The result of this hesitance means the largest port gateway in North America being denied the easiest route to capacity expansion to mitigate bottlenecks that for years have bogged down flow during periods of surge demand. “It doesn’t matter what is in the contract or who has negotiated what,” said a knowledgeable observer of longshore labor in Southern California. “The ports are not going to agree to any redevelopment that supports automation and goes against the will of the ILWU.” The long-term consequences are limits on effective capacity able to handle US container flows, increasing the potential for bottlenecks and delays given limited new terminal acreage coming online. The roadblocks come despite the known benefits of automation. During the COVID disruptions, throughput at existing automated terminals at the ports of Los Angeles and Long Beach was 44% higher than at non-automated terminals, <a href="https://www.pmanet.org/fact-sheets/technology-automation/">according to a recent study cited</a> by the PMA. Also, longshore employment rose faster than at non-automated terminals, countering the union’s argument that automation is a job killer. “Technological advancement, including automation, is essential to maintaining the competitiveness, efficiency, and long-term viability of West Coast ports,” the PMA said in a statement to the Journal of Commerce late last week. <h3>The need to work ‘hand-in-hand’ with the union </h3>Illustrations of the snail’s pace at which automation is proceeding can be seen in two scenarios in Southern California where terminals aspire to automate. At TTI, the largest terminal at the Port of Long Beach, a manning agreement was struck three years ago with the ILWU Southern California local, sources said. The deal was meant to allow automation to proceed at the former Hanjin terminal, now owned by Terminal Investment Limited (TiL), the terminal arm of Mediterranean Shipping Co. (MSC). But despite concessions to the union that would undermine the financial case for automation by increasing labor costs, there is no sign of automation being announced to allow MSC to increase throughput, let alone being approved by the Long Beach Board of Harbor Commissioners. Similarly, at the Pier 300 Fenix terminal at Los Angeles owned by CMA CGM, no application has been filed to automate, according to the port. This is despite the terminal allowing construction to proceed on a rail project in return for what it hoped, sources said, would be the port’s support to automate a new berth slated for a long-vacant lot next to the existing terminal. The knowledgeable observer of Southern California longshore labor said TTI and Fenix might be far enough along to eventually implement automation, but “anything beyond that you are not going to see it unless something changes politically.” The unofficial view at the two ports, based on numerous interviews, is that for automation to proceed, a terminal must come to the port commission hand-in-hand with the union. The precedent, sources said, is Long Beach Container Terminal, which secured the union’s approval to engage in a multi-year automation project completed in 2021. It is now widely regarded as the most efficient facility in the harbor. “Technology is moving fast, but it cannot leave the workforce behind,” Port of Los Angeles Executive Director Gene Seroka told the Journal of Commerce. “There is a way to combine both, an employer and the union coming together with politicians to find a way forward.” Without ILWU sign-off, the ports risk — and wish to avoid — a repeat of the headline-grabbing union protests that disrupted meetings of the Los Angeles Board of Harbor Commissioners in 2019 when it was considering a construction permit necessary for automation at APM Terminals’ Pier 400 facility. That clash, over what in prior years would have been a routine construction permit to be signed off by the port commission, signaled a new phase wherein the union would seek to slow or stop automation by going outside the collective bargaining agreement. “This all started with Pier 400 and APMT,” said one management source. The union’s views over automation had hardened since 2008, in parallel with the emergence of new labor-saving technology like AI and, more recently, a global anti-automation crusade led by International Longshoremen Association (ILA) President Harold Daggett. The risk of negative publicity for the ports, and the opportunity for the union to grab a global megaphone, is heighted due to the 2028 Summer Olympics in Los Angeles — set to begin two weeks after the current West Coast longshore contract expires on July 1, 2028. The ports also wish to avoid a labor showdown that could lead to further market share loss to the East and Gulf coasts. The ILWU declined to comment. <h3>The legislative route </h3>It isn’t just influence at the port commissions, moreover, where dockworkers are trying to thwart automation. In recent years, the PMA has found itself fighting off efforts by the union to undermine automation through legislation in Sacramento. Employers prevailed last October, for example, when Gov. Gavin Newsom vetoed a bill that would have banned current and future automated or remotely operated technology at California ports from plugging into the state’s power grid, in effect killing automation. “Efforts to use the political process to block or delay automation have not succeeded and will not alter the terms of the collective bargaining agreement, which explicitly allows for automation at port terminals,” the PMA said in its statement. The PMA now carefully scrutinizes all proposed legislation for possible new restrictions on automation inserted by ILWU lobbyists. Union efforts to thwart automation, whether at the state or port level, raise the question of whether in doing so it’s in violation of the contract. According to the PMA website, the contract states, “There shall be no interference by the union with the employers’ right to operate efficiently and to change methods of work to utilize labor-saving devices.” To this point, some argue the labor activity is merely individual union members engaging in First Amendment-protected speech. But others point to apparently official union views, including “profound disappointment” at the Newsom veto <a href="https://ilwu13.com/wp-content/uploads/2025/10/10-13-25-ILWU-President-Olvera-Jr-letter-to-Gov.-Newsom-re-SB-34-Veto.pdf">expressed in a toughly worded letter</a> by ILWU International President Robert Olvera Jr. The union’s assertive anti-automation stance raises the possibility it will seek to roll back terminals’ automation rights during negotiations for the next coastwide contract. “I do believe that ILWU will take a run at further restricting automation on the USWC,” said a second knowledgeable source. “They are actively seeking to control automation today through other means including licensing, permitting and trying to use legislation to restrict the use of green electricity.” Other sources believe the PMA will never negotiate away its automation rights, while others believe the ILWU has already effectively won the issue. Said the first informed source: “The union can move on to other topics. They have their playbook, so they don’t need to renegotiate automation.” Contact Peter Tirschwell at <a href="mailto:peter.tirschwell@spglobal.com">peter.tirschwell@spglobal.com</a>. </div>

An article of faith for nearly two decades — that marine terminals along the US West Coast have the right to automate and thereby increase capacity despite limited port land to physically expand — is under threat in Southern California. It has become difficult, if not impossible, for terminals wishing to automate to gain the necessary approvals from port commissions to proceed. This is despite the terminals’ right to automate being guaranteed since 2008 in the collective bargaining agreement between the International Longshore and Warehouse Union (ILWU) and employers represented by the Pacific Maritime Association (PMA). The result of this hesitance means the largest port gateway in North America being denied the easiest route to capacity expansion to mitigate bottlenecks that for years have bogged down flow during periods of surge demand. “It doesn’t matter what is in the contract or who has negotiated what,” said a knowledgeable observer of longshore labor in Southern California. “The ports are not going to agree to any redevelopment that supports automation and goes against the will of the ILWU.” The long-term consequences are limits on effective capacity able to handle US container flows, increasing the potential for bottlenecks and delays given limited new terminal acreage coming online. The roadblocks come despite the known benefits of automation. During the COVID disruptions, throughput at existing automated terminals at the ports of Los Angeles and Long Beach was 44% higher than at non-automated terminals, according to a recent study cited by the PMA. Also, longshore employment rose faster than at non-automated terminals, countering the union’s argument that automation is a job killer. “Technological advancement, including automation, is essential to maintaining the competitiveness, efficiency, and long-term viability of West Coast ports,” the PMA said in a statement to the Journal of Commerce late last week. The need to work ‘hand-in-hand’ with the union Illustrations of the snail’s pace at which automation is proceeding can be seen in two scenarios in Southern California where terminals aspire to automate. At TTI, the largest terminal at the Port of Long Beach, a manning agreement was struck three years ago with the ILWU Southern California local, sources said. The deal was meant to allow automation to proceed at the former Hanjin terminal, now owned by Terminal Investment Limited (TiL), the terminal arm of Mediterranean Shipping Co. (MSC). But despite concessions to the union that would undermine the financial case for automation by increasing labor costs, there is no sign of automation being announced to allow MSC to increase throughput, let alone being approved by the Long Beach Board of Harbor Commissioners. Similarly, at the Pier 300 Fenix terminal at Los Angeles owned by CMA CGM, no application has been filed to automate, according to the port. This is despite the terminal allowing construction to proceed on a rail project in return for what it hoped, sources said, would be the port’s support to automate a new berth slated for a long-vacant lot next to the existing terminal. The knowledgeable observer of Southern California longshore labor said TTI and Fenix might be far enough along to eventually implement automation, but “anything beyond that you are not going to see it unless something changes politically.” The unofficial view at the two ports, based on numerous interviews, is that for automation to proceed, a terminal must come to the port commission hand-in-hand with the union. The precedent, sources said, is Long Beach Container Terminal, which secured the union’s approval to engage in a multi-year automation project completed in 2021. It is now widely regarded as the most efficient facility in the harbor. “Technology is moving fast, but it cannot leave the workforce behind,” Port of Los Angeles Executive Director Gene Seroka told the Journal of Commerce. “There is a way to combine both, an employer and the union coming together with politicians to find a way forward.” Without ILWU sign-off, the ports risk — and wish to avoid — a repeat of the headline-grabbing union protests that disrupted meetings of the Los Angeles Board of Harbor Commissioners in 2019 when it was considering a construction permit necessary for automation at APM Terminals’ Pier 400 facility. That clash, over what in prior years would have been a routine construction permit to be signed off by the port commission, signaled a new phase wherein the union would seek to slow or stop automation by going outside the collective bargaining agreement. “This all started with Pier 400 and APMT,” said one management source. The union’s views over automation had hardened since 2008, in parallel with the emergence of new labor-saving technology like AI and, more recently, a global anti-automation crusade led by International Longshoremen Association (ILA) President Harold Daggett. The risk of negative publicity for the ports, and the opportunity for the union to grab a global megaphone, is heighted due to the 2028 Summer Olympics in Los Angeles — set to begin two weeks after the current West Coast longshore contract expires on July 1, 2028. The ports also wish to avoid a labor showdown that could lead to further market share loss to the East and Gulf coasts. The ILWU declined to comment. The legislative route It isn’t just influence at the port commissions, moreover, where dockworkers are trying to thwart automation. In recent years, the PMA has found itself fighting off efforts by the union to undermine automation through legislation in Sacramento. Employers prevailed last October, for example, when Gov. Gavin Newsom vetoed a bill that would have banned current and future automated or remotely operated technology at California ports from plugging into the state’s power grid, in effect killing automation. “Efforts to use the political process to block or delay automation have not succeeded and will not alter the terms of the collective bargaining agreement, which explicitly allows for automation at port terminals,” the PMA said in its statement. The PMA now carefully scrutinizes all proposed legislation for possible new restrictions on automation inserted by ILWU lobbyists. Union efforts to thwart automation, whether at the state or port level, raise the question of whether in doing so it’s in violation of the contract. According to the PMA website, the contract states, “There shall be no interference by the union with the employers’ right to operate efficiently and to change methods of work to utilize labor-saving devices.” To this point, some argue the labor activity is merely individual union members engaging in First Amendment-protected speech. But others point to apparently official union views, including “profound disappointment” at the Newsom veto expressed in a toughly worded letter by ILWU International President Robert Olvera Jr. The union’s assertive anti-automation stance raises the possibility it will seek to roll back terminals’ automation rights during negotiations for the next coastwide contract. “I do believe that ILWU will take a run at further restricting automation on the USWC,” said a second knowledgeable source. “They are actively seeking to control automation today through other means including licensing, permitting and trying to use legislation to restrict the use of green electricity.” Other sources believe the PMA will never negotiate away its automation rights, while others believe the ILWU has already effectively won the issue. Said the first informed source: “The union can move on to other topics. They have their playbook, so they don’t need to renegotiate automation.” Contact Peter Tirschwell at peter.tirschwell@spglobal.com .

Port News

Transport, Trade and Regulation News

Marine terminals

Longshore labor

Maritime

Hesitation from port authorities slows automation in Southern California

<div class="phx-topic abstract-wrapper">The departure of the Montreal Port Authority CEO comes just as development work begins on a new US$1.15 billion container terminal.</div>

The departure of the Montreal Port Authority CEO comes just as development work begins on a new US$1.15 billion container terminal.

<div class="phx-topic">The two-year tenure of Montreal Port Authority (MPA) chief Julie Gascon ended abruptly Friday, just as development work is beginning on a C$1.6 billion (US$1.15 billion) container terminal to be operated by DP World. A statement from the port authority gave no reason for the departure of Gascon, who became president and CEO of the agency in February 2024. A committee of the port authority’s board of directors will work to ensure interim leadership is in place as Gascon’s successor is sought, according to the statement. “With the Contrecoeur terminal expansion project actively progressing, the Port of Montreal is entering a new phase in its development, which will take place as part of a new strategic cycle for the MPA,” said Nathalie Pilon, chair of the MPA’s board of directors. “The organization is in an excellent position to fulfill its mandate and contribute to Canada’s competitiveness in global markets.” Gascon oversaw DP World <a href="https://www.joc.com/article/dp-world-aims-to-run-carney-backed-montreal-terminal-6072977">being awarded the winning bid</a> to operate the Contrecoeur terminal, which, with a planned annual capacity of 1.15 million TEUs, would increase the total capacity of Canada’s second-largest container port by 150%. Gascon was viewed locally as bringing more maritime expertise and a greater commercial understanding to the role as MPA chief when she succeeded utility veteran Martin Imbleau, who also abruptly exited in July 2023. Contact the JOC news team at <a href="mailto:News@joc.com">news@joc.com.</a></div>

The two-year tenure of Montreal Port Authority (MPA) chief Julie Gascon ended abruptly Friday, just as development work is beginning on a C$1.6 billion (US$1.15 billion) container terminal to be operated by DP World. A statement from the port authority gave no reason for the departure of Gascon, who became president and CEO of the agency in February 2024. A committee of the port authority’s board of directors will work to ensure interim leadership is in place as Gascon’s successor is sought, according to the statement. “With the Contrecoeur terminal expansion project actively progressing, the Port of Montreal is entering a new phase in its development, which will take place as part of a new strategic cycle for the MPA,” said Nathalie Pilon, chair of the MPA’s board of directors. “The organization is in an excellent position to fulfill its mandate and contribute to Canada’s competitiveness in global markets.” Gascon oversaw DP World being awarded the winning bid to operate the Contrecoeur terminal, which, with a planned annual capacity of 1.15 million TEUs, would increase the total capacity of Canada’s second-largest container port by 150%. Gascon was viewed locally as bringing more maritime expertise and a greater commercial understanding to the role as MPA chief when she succeeded utility veteran Martin Imbleau, who also abruptly exited in July 2023. Contact the JOC news team at news@joc.com.

North American ports

Container Shipping News

Montreal Port chief Gascon exits abruptly after two-year tenure

<div class="phx-topic abstract-wrapper">The port’s chief executive said his agency will do more to attract large retail BCOs to reverse lost market share, while also investing in non-container projects. </div>

The port’s chief executive said his agency will do more to attract large retail BCOs to reverse lost market share, while also investing in non-container projects.

<div class="phx-topic">The Port of Charleston will aggressively court retail goods shippers — and possibly invest alongside them — as part of a long-term strategy to regrow the port’s volumes. The port is also looking at how to restructure the operating model of its Leatherman marine terminal following the longshore union’s 2024 victory over work jurisdiction at the facility. South Carolina Ports Authority Chief Executive Micah Mallace told a state senate committee this Wednesday that Charleston’s container volumes for the first eight months of the 2026 fiscal year through February are running about 6% below SC Ports’ original forecast. Along with the overall trade challenges hitting every port, Charleston is heavily levered to the state’s advanced manufacturers, with BMW being the port’s largest customer, Mallace said. The German automaker lowered its 2026 profit outlook in March due to a combination of tariffs, material costs and competition from Chinese automakers. Mallace, who also helped the port attract a Walmart distribution center to Charleston six years ago, said the port needs more such retail shippers to reverse its market share losses. He said the demographics for South Carolina and the Southeast favor a long-term consumer base and that more large retail shippers will further reinforce the manufacturing cargo base through overall job growth. “We need a large local cargo base,” Mallace said. “We have to do a better job of having a compelling offering for distribution center locations and major retailers. The retailers determine where the ships call, and the manufacturers follow.” “Shipping lines pick ports because they have to go there,” he added. “If we can grow our local freight base, the shipping lines will come irrespective of how well we service them and how much it costs.”<h3>Port will ‘carry the water’ on new projects </h3>While offering few direct details about SC Port’s new strategy, Mallace said the agency in the short term will be beefing up its commercial and sales team and increasing outreach to potential shippers. Mallace also told state senators that SC Ports will be redirecting capital spending to “immediate revenue generating opportunities” for the port. At a mid-March board meeting, SC Ports’ CFO Phillip Padgett said overall revenue of $267 million for the eight-month fiscal 2026 period was 4% below forecast. Decreases in container activity, terminal demurrage and chassis rentals were cited for the decline. Mallace did not elaborate on the types of investments the port would make, but he said the agency has a lot of land that could be leased or otherwise monetized. He also suggested SC Ports could take on the role of economic development agency by helping fund or underwrite retail distribution or similar projects to increase the cargo base.“If we have to carry the water on those projects, we will,” Mallace said. “We have to in order to be a going concern in the port industry.“You will see us do deals that don’t look like what we used to do in the past, which were only container-related,” he said. “There are some exciting prospects out there.”The redirection of capital spending comes as Charleston has largely completed most of its short-term port expansion and now just needs to “fill it up” Mallace said. <h3>Leatherman costs need addressing</h3>Work on the Navy Base Intermodal Facility, <a href="https://www.joc.com/article/charlestons-navy-base-rail-yard-project-faces-delays-big-cost-overruns-6070926">which has faced cost overruns and a delayed opening</a>, is largely done, Mallace said. However, the port’s near-dock rail facility still needs about 80,000 feet of rail track installed across North Charleston for it to access the Norfolk Southern Railway and CSX Transportation networks. He said the port is close to reaching operating agreements with both railroads while <a href="https://www.joc.com/article/charleston-slows-railyard-development-amid-insufficient-shipper-demand-6164158">it waits for enough shipper demand to fill the railcars</a>.“The last remaining infrastructure on which we are focused is to get both railroads into the terminal,” Mallace said. “It’s what still needs to be delivered, and it’s very complicated.”SC Ports is also looking at how to restructure its operations at the Hugh K. Leatherman Terminal, which was effectively closed for three years due to a dispute with the International Longshoremen’s Association (ILA) over work jurisdiction for crane jobs that began in 2021. <a href="https://www.joc.com/article/sc-ports-strikes-deal-with-ila-to-fully-open-leatherman-marine-terminal-5192280">SC Ports reached an agreement</a> in 2024 that put Leatherman’s crane operators, who were formerly state employees, under ILA jurisdiction at its contracted wages. As part of that change, SC Ports began levying a $17.95 per container fee to “offset the change in the labor model cost structure.”The change in business model has made Leatherman less cost competitive than SC Ports’ Wando Welch terminal, which retains state crane operators. Mallace said the current freight environment is prizing cost above all, and higher-cost facilities are not competitive. He added that the port is negotiating with the local ILA on how to make Leatherman more efficient. “The Hugh Leatherman terminal has a cost structure that’s different than others in the South Atlantic,” Mallace said. “We are working with our partners to address that right now.” He added that the port, which has been offering employees early retirement packages, is also dealing with higher fuel and other costs that need to be addressed. “Our costs are a little out of line with where they need to be for us to offer the most competitive rates that we can offer,” Mallace told state senators. “Our customers choose us based on cost, first and foremost. Service and other things are also considered. But cost is first and foremost.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a> </div>

The Port of Charleston will aggressively court retail goods shippers — and possibly invest alongside them — as part of a long-term strategy to regrow the port’s volumes. The port is also looking at how to restructure the operating model of its Leatherman marine terminal following the longshore union’s 2024 victory over work jurisdiction at the facility. South Carolina Ports Authority Chief Executive Micah Mallace told a state senate committee this Wednesday that Charleston’s container volumes for the first eight months of the 2026 fiscal year through February are running about 6% below SC Ports’ original forecast. Along with the overall trade challenges hitting every port, Charleston is heavily levered to the state’s advanced manufacturers, with BMW being the port’s largest customer, Mallace said. The German automaker lowered its 2026 profit outlook in March due to a combination of tariffs, material costs and competition from Chinese automakers. Mallace, who also helped the port attract a Walmart distribution center to Charleston six years ago, said the port needs more such retail shippers to reverse its market share losses. He said the demographics for South Carolina and the Southeast favor a long-term consumer base and that more large retail shippers will further reinforce the manufacturing cargo base through overall job growth. “We need a large local cargo base,” Mallace said. “We have to do a better job of having a compelling offering for distribution center locations and major retailers. The retailers determine where the ships call, and the manufacturers follow.” “Shipping lines pick ports because they have to go there,” he added. “If we can grow our local freight base, the shipping lines will come irrespective of how well we service them and how much it costs.” Port will ‘carry the water’ on new projects While offering few direct details about SC Port’s new strategy, Mallace said the agency in the short term will be beefing up its commercial and sales team and increasing outreach to potential shippers. Mallace also told state senators that SC Ports will be redirecting capital spending to “immediate revenue generating opportunities” for the port. At a mid-March board meeting, SC Ports’ CFO Phillip Padgett said overall revenue of $267 million for the eight-month fiscal 2026 period was 4% below forecast. Decreases in container activity, terminal demurrage and chassis rentals were cited for the decline. Mallace did not elaborate on the types of investments the port would make, but he said the agency has a lot of land that could be leased or otherwise monetized. He also suggested SC Ports could take on the role of economic development agency by helping fund or underwrite retail distribution or similar projects to increase the cargo base. “If we have to carry the water on those projects, we will,” Mallace said. “We have to in order to be a going concern in the port industry. “You will see us do deals that don’t look like what we used to do in the past, which were only container-related,” he said. “There are some exciting prospects out there.” The redirection of capital spending comes as Charleston has largely completed most of its short-term port expansion and now just needs to “fill it up” Mallace said. Leatherman costs need addressing Work on the Navy Base Intermodal Facility, which has faced cost overruns and a delayed opening , is largely done, Mallace said. However, the port’s near-dock rail facility still needs about 80,000 feet of rail track installed across North Charleston for it to access the Norfolk Southern Railway and CSX Transportation networks. He said the port is close to reaching operating agreements with both railroads while it waits for enough shipper demand to fill the railcars . “The last remaining infrastructure on which we are focused is to get both railroads into the terminal,” Mallace said. “It’s what still needs to be delivered, and it’s very complicated.” SC Ports is also looking at how to restructure its operations at the Hugh K. Leatherman Terminal, which was effectively closed for three years due to a dispute with the International Longshoremen’s Association (ILA) over work jurisdiction for crane jobs that began in 2021. SC Ports reached an agreement in 2024 that put Leatherman’s crane operators, who were formerly state employees, under ILA jurisdiction at its contracted wages. As part of that change, SC Ports began levying a $17.95 per container fee to “offset the change in the labor model cost structure.” The change in business model has made Leatherman less cost competitive than SC Ports’ Wando Welch terminal, which retains state crane operators. Mallace said the current freight environment is prizing cost above all, and higher-cost facilities are not competitive. He added that the port is negotiating with the local ILA on how to make Leatherman more efficient. “The Hugh Leatherman terminal has a cost structure that’s different than others in the South Atlantic,” Mallace said. “We are working with our partners to address that right now.” He added that the port, which has been offering employees early retirement packages, is also dealing with higher fuel and other costs that need to be addressed. “Our costs are a little out of line with where they need to be for us to offer the most competitive rates that we can offer,” Mallace told state senators. “Our customers choose us based on cost, first and foremost. Service and other things are also considered. But cost is first and foremost.” Contact Michael Angell at michael.angell@spglobal.com

Charleston looking for retailer shippers to revive port’s growth

<div class="phx-topic abstract-wrapper">The unanimous decision prevents the carrier from immediately implementing the fee, which is meant to help recoup fuel costs on US trades that have been driven higher due to the war with Iran.</div>

The unanimous decision prevents the carrier from immediately implementing the fee, which is meant to help recoup fuel costs on US trades that have been driven higher due to the war with Iran.

<div class="phx-topic">The Federal Maritime Commission (FMC) has rejected a second request from Maersk to waive a 30-day notice period for the implementation of an emergency fuel surcharge, a spokesperson for the agency said Friday. The unanimous rejection prevents the carrier from immediately implementing the fee, which is meant to help recoup fuel costs on US trades that have been driven higher due to the war with Iran. Still, Maersk will only have to wait until April 8 to formally implement the fee, given that its <a href="https://www.joc.com/article/maersk-again-asks-fmc-to-waive-30-day-review-period-for-emergency-fuel-surcharge-6197792">waiver request to the FMC was made on March 11.</a>An April 3 letter from the FMC to Maersk said the carrier “failed to provide good cause” for the agency to waive the 30-day waiting period, and referred to a prior statement from FMC Chairman Laura DiBella that carriers should provide data behind the decision to levy the emergency surcharges and specify a duration, so, as DiBella said, the fee is “reasonably related to the increased costs.” In its petition, Maersk stressed that the surcharges were tied only to higher fuel prices, pointing to how low-sulfur bunker fuel prices jumped 82% on average, to $929 per metric ton, between Feb. 6 and March 9; the war began Feb. 28. The carrier justified the emergency fuel surcharge, saying it couldn’t fully absorb the higher prices that “are likely to remain elevated and volatile given the uncertainty of the duration of hostilities and their impact on the price of oil and bunker fuel.” The surcharge Maersk will implement next week amounts to $200 per TEU for US head-haul trades and $100 per TEU for the backhaul. This week’s rejection of Maersk’s waiver request was the second time in 11 days the carrier was turned down. The FMC <a href="https://www.joc.com/article/fmc-rejects-requests-by-carriers-to-waive-waiting-period-for-middle-east-surcharges-6191881">on March 23 rejected requests</a> from Maersk, CMA CGM, Hapag-Lloyd, and Zim Integrated Shipping Services to waive the 30-day waiting period for an initial round of emergency fuel surcharges. <h3>Costs rise as concerns grow over fuel availability </h3>Shipper groups, including the Agriculture Transportation Coalition, are skeptical of ocean carriers imposing higher fuel surcharges given that it is not clear how the surcharge amounts were calculated and that freight-all-kinds (FAK) rates include fuel costs. For contract rates, the so-called bunker adjustment factor (BAF) adjusts to higher fuel prices, but it can take up to two months to calibrate to the new levels, hampering ocean carriers’ cash flow in the short-term. The cost of war-related disruption has been substantial. Hapag-Lloyd, for example, is facing $40 million to $50 million per week in higher operating expenses due to war, now in its fifth week, <a href="https://www.joc.com/article/war-adding-40-50-million-per-week-to-hapag-lloyds-costs-ceo-6193532">CEO Rolf Habben Jansen told reporters on March 26.</a> But the higher price of bunker fuel is not the only problem. Fuel availability, particularly in Asia, is becoming a growing concern for ocean carriers, with analysts warning that the world’s largest bunkering hub of Singapore <a href="https://www.joc.com/article/singapore-bunker-supply-continues-to-run-down-as-middle-east-war-drags-on-6198359">has less than a month’s supply remaining and no replenishment in sight</a>. If bunker fuel scarcity worsens, container lines could be forced to sail slower, take alternative routes, or blank sailings. Contact Mark Szakonyi at <a href="mailto:mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com.</a></div>

The Federal Maritime Commission (FMC) has rejected a second request from Maersk to waive a 30-day notice period for the implementation of an emergency fuel surcharge, a spokesperson for the agency said Friday. The unanimous rejection prevents the carrier from immediately implementing the fee, which is meant to help recoup fuel costs on US trades that have been driven higher due to the war with Iran. Still, Maersk will only have to wait until April 8 to formally implement the fee, given that its waiver request to the FMC was made on March 11. An April 3 letter from the FMC to Maersk said the carrier “failed to provide good cause” for the agency to waive the 30-day waiting period, and referred to a prior statement from FMC Chairman Laura DiBella that carriers should provide data behind the decision to levy the emergency surcharges and specify a duration, so, as DiBella said, the fee is “reasonably related to the increased costs.” In its petition, Maersk stressed that the surcharges were tied only to higher fuel prices, pointing to how low-sulfur bunker fuel prices jumped 82% on average, to $929 per metric ton, between Feb. 6 and March 9; the war began Feb. 28. The carrier justified the emergency fuel surcharge, saying it couldn’t fully absorb the higher prices that “are likely to remain elevated and volatile given the uncertainty of the duration of hostilities and their impact on the price of oil and bunker fuel.” The surcharge Maersk will implement next week amounts to $200 per TEU for US head-haul trades and $100 per TEU for the backhaul. This week’s rejection of Maersk’s waiver request was the second time in 11 days the carrier was turned down. The FMC on March 23 rejected requests from Maersk, CMA CGM, Hapag-Lloyd, and Zim Integrated Shipping Services to waive the 30-day waiting period for an initial round of emergency fuel surcharges. Costs rise as concerns grow over fuel availability Shipper groups, including the Agriculture Transportation Coalition, are skeptical of ocean carriers imposing higher fuel surcharges given that it is not clear how the surcharge amounts were calculated and that freight-all-kinds (FAK) rates include fuel costs. For contract rates, the so-called bunker adjustment factor (BAF) adjusts to higher fuel prices, but it can take up to two months to calibrate to the new levels, hampering ocean carriers’ cash flow in the short-term. The cost of war-related disruption has been substantial. Hapag-Lloyd, for example, is facing $40 million to $50 million per week in higher operating expenses due to war, now in its fifth week, CEO Rolf Habben Jansen told reporters on March 26. But the higher price of bunker fuel is not the only problem. Fuel availability, particularly in Asia, is becoming a growing concern for ocean carriers, with analysts warning that the world’s largest bunkering hub of Singapore has less than a month’s supply remaining and no replenishment in sight . If bunker fuel scarcity worsens, container lines could be forced to sail slower, take alternative routes, or blank sailings. Contact Mark Szakonyi at  mark.szakonyi@spglobal.com.

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FMC again rejects Maersk petition to waive notice period for emergency fuel surcharge

<div class="phx-topic abstract-wrapper">The CMA CGM Kribi successfully transited the strait late Thursday, the first passage for a Western-operated container ship since the war between the US/Israel and Iran disrupted access to the crucial waterway five weeks ago.</div>

The CMA CGM Kribi successfully transited the strait late Thursday, the first passage for a Western-operated container ship since the war between the US/Israel and Iran disrupted access to the crucial waterway five weeks ago.

<div class="phx-topic">French ocean carrier CMA CGM is understood to have secured assurances from Iranian authorities guaranteeing safe passage for its 14 container ships trapped inside the Strait of Hormuz since the war began, industry sources with knowledge of the matter told the Journal of Commerce Friday. Signaling that breakthrough, the Malta-flagged CMA CGM Kribi successfully transited the strait late Thursday local time, the first passage for a Western-operated container ship since the war between the US/Israel and Iran disrupted access to the crucial waterway five weeks ago. The 5,500-TEU Kribi is part of the Marseille-based carrier’s Middle East-India-West Africa network known as Midas1 and operated in conjunction with Maersk, available data shows. The industry sources also indicated that there are another six CMA CGM container vessels held up in the Persian Gulf and awaiting clearance to transit Hormuz. The sources believe the measured approach adopted by French President Emmanuel Macron during the Persian Gulf conflict has helped CMA CGM strike a deal with Iran, which recently reiterated that Hormuz would only remain open to maritime traffic from nonhostile countries. Specifics of any possible deal between the carrier and Iran were not known. There have been unconfirmed reports that Tehran is asking carriers to pay a “toll fee” of $1 million or $2 million per ship to guarantee safe passage through the strait. During a briefing with reporters last week, <a href="https://www.joc.com/article/war-adding-40-50-million-per-week-to-hapag-lloyds-costs-ceo-6193532">Hapag-Lloyd CEO Rolf Habben Jansen was asked</a> whether the carrier would pay Tehran to secure safe passage for its six ships that remain trapped in the war zone. “We are pursuing every avenue that we can to try to get the ships and the crews safely out, and I would not rule out anything at this point,” Habben Jansen said. Earlier this week, three Chinese-linked vessels, including two container ships operated by Cosco Shipping, transited through Hormuz. The industry sources also told the Journal of Commerce that 15 ships operated by Mediterranean Shipping Co. are stuck in the conflict zone, as well as six from Maersk. Contact Bency Mathew at <a href="mailto:bencyvmathew@gmail.com">bencyvmathew@gmail.com.</a></div>

French ocean carrier CMA CGM is understood to have secured assurances from Iranian authorities guaranteeing safe passage for its 14 container ships trapped inside the Strait of Hormuz since the war began, industry sources with knowledge of the matter told the Journal of Commerce Friday. Signaling that breakthrough, the Malta-flagged CMA CGM Kribi successfully transited the strait late Thursday local time, the first passage for a Western-operated container ship since the war between the US/Israel and Iran disrupted access to the crucial waterway five weeks ago. The 5,500-TEU Kribi is part of the Marseille-based carrier’s Middle East-India-West Africa network known as Midas1 and operated in conjunction with Maersk, available data shows. The industry sources also indicated that there are another six CMA CGM container vessels held up in the Persian Gulf and awaiting clearance to transit Hormuz. The sources believe the measured approach adopted by French President Emmanuel Macron during the Persian Gulf conflict has helped CMA CGM strike a deal with Iran, which recently reiterated that Hormuz would only remain open to maritime traffic from nonhostile countries. Specifics of any possible deal between the carrier and Iran were not known. There have been unconfirmed reports that Tehran is asking carriers to pay a “toll fee” of $1 million or $2 million per ship to guarantee safe passage through the strait. During a briefing with reporters last week, Hapag-Lloyd CEO Rolf Habben Jansen was asked whether the carrier would pay Tehran to secure safe passage for its six ships that remain trapped in the war zone. “We are pursuing every avenue that we can to try to get the ships and the crews safely out, and I would not rule out anything at this point,” Habben Jansen said. Earlier this week, three Chinese-linked vessels, including two container ships operated by Cosco Shipping, transited through Hormuz. The industry sources also told the Journal of Commerce that 15 ships operated by Mediterranean Shipping Co. are stuck in the conflict zone, as well as six from Maersk. Contact Bency Mathew at bencyvmathew@gmail.com.

CMA CGM said to have deal with Iran to allow safe passage through Hormuz: sources

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