<div class="phx-topic abstract-wrapper">Shippers and ocean carriers told the Journal of Commerce they are reviewing the USTR actions to estimate how the fees will flow down to freight costs. </div>

Shippers and ocean carriers told the Journal of Commerce they are reviewing the USTR actions to estimate how the fees will flow down to freight costs.

Feature image

<div class="phx-topic">Cosco Shipping says new fees that Chinese carriers and ships will be forced to pay for calling the US — possibly as high as $8 million to $10 million per voyage, according to one analyst — are unfair and will “distort” the ocean shipping market. That comes as other ocean carriers grapple with the impact of the fees on freight costs and how to redraw their networks to avoid them. Cosco Shipping Corporation, the container line’s parent, said in a statement Monday that the US Trade Representative (USTR) made a “discriminatory decision” in <a href="https://www.joc.com/article/scaled-back-ustr-port-tariff-to-hit-chinese-carriers-hardest-5987549">issuing new fees against China’s maritime industry</a>. It said the charges unveiled Friday against China-based ocean carriers and Chinese-built ships in all other fleets will put <a href="https://www.joc.com/article/us-port-tax-would-scramble-ocean-services-raise-shipper-costs-drewry-5952046">global supply chains at risk of higher costs and result in less-efficient service</a>. “We firmly oppose the [USTR’s] accusations and the subsequent measures,” Cosco said. “Such measures not only distort fair competition and impede the normal functioning of the global shipping industry, but also threaten its stable and sustainable development.” Barring their rescission, the fees are the USTR’s final actions against China’s carriers and container ships and will take effect in October. The fees will only be charged on the first US port of call on a vessel string, unlike the per-port fee schedule in the original USTR plan. The revised per-voyage fee will be charged a maximum of five times per year on each affected vessel. <h3>Confusion on net tonnage </h3><a href="https://www.joc.com/article/us-port-fees-could-hit-chinese-ships-under-trump-trade-proposal-5949409">While less draconian than the initial USTR proposal</a>, Cosco and its Hong Kong subsidiary OOCL face fees that are three times higher than what would be charged to all other ocean carriers. The USTR said the goal of the fees is to “disincentivize” shippers from using China’s ocean carriers. Starting this October, China’s ocean carriers will have to pay $50 per net ton of a vessel arriving at US ports. The fee goes up $30 each year on the anniversary of the USTR’s actions, topping out at $140 in 2028. Ocean carriers based outside of China operating Chinese-built ships will face a fee based on either net tonnage or container volume, whichever is higher. The tonnage fee for non-Chinese carriers starts at $18, escalating to $23 by April 2026 and topping out at $33 in 2028. The per-container fee starts at $120 and rises to $153 next year and $250 in 2028. Shippers and ocean carriers told the Journal of Commerce that they are reviewing the USTR actions to estimate how the fees will flow down to freight costs. But until there’s more clarity from the USTR, the fees are best guesses at this point. The fees are based on a ship’s “net tonnage,” but the USTR’s order does not include a definition of net tonnage. According to the US Coast Guard Marine Safety Center, net tonnage refers to a ship’s internal volume for cargo and is not measured in tons similar to a ship’s deadweight. The US signed a 1969 treaty that bound it to an international convention on measuring net tonnage that is included on a ship’s documentation. However, the Coast Guard noted that there are other ways to measure net tonnage that account for different types of vessels. Data from Sea-web, a sister product of the Journal of Commerce within S&amp;P Global, shows the net tonnage of Chinese-built ships of 12,000-TEU to 15,000-TEU capacity can range anywhere from 60,000 to 85,000. Sea-web uses the 1969 international convention on net tonnage. An executive with an independent ocean carrier told the Journal of Commerce that its US services might typically include Chinese-built ships of 8,500-TEU capacity and net tonnage of about 64,000. That would result in a total estimated fee of about $1.2 million, which would average out to approximately $275 to $300 per container, assuming the ship is full at 4,000 containers. The $300 estimate “is in the range of what we are expecting,” the source said. “But we will reshuffle our vessels to limit exposure to USTR fees, so it’s likely to be less overall,” he added. In contrast, the 13,800-TEU Cosco Shipping Rose, which calls the US East Coast, has net tonnage of 84,940. That would put its port call fee at over $4 million, equating to about $600 per container assuming it is carrying over 6,000 containers. An executive with a European alliance carrier said multiple factors make a per-container rate difficult to estimate at this point, including the fact that ships are not always arriving in port full. Net tonnage generally refers to a ship’s internal volume, but container ships also carry freight on top of their hatches. The source said the USTR fees will result in costs “probably higher” than $300 per container. <h3>Ocean Alliance in focus </h3>Whatever fees other container lines face, Cosco and OOCL face triple the costs. That has some industry watchers looking for both carriers to shuffle US services offered under the Ocean Alliance, alongside partners CMA CGM and Evergreen Marine. Thanks to their role among China’s exporters, Cosco and OOCL have the leading market share in trans-Pacific services to the US, according to data from PIERS, a sister company of the Journal of Commerce within S&amp;P Global. Cosco and OOCL handled just over 17% of trans-Pacific imports to all US coasts during March 2025. CMA CGM came in second at 13.6%. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="17b008be-6389-4bcf-974c-dea36b662564"></dynamic-object></div>Of Ocean Alliance’s nine direct services to the US West Coast, four are operated by Cosco and OOCL. Those include the Bohai, Hibiscus Express and Yangtse services to Long Beach and the Dahlia service to Seattle. Cosco and OOCL also supply ships to the Manhattan Bridge and South Atlantic Express services to the US East Coast and the Gulf of Mexico Express service. Lars Jensen, CEO and partner of consultancy Vespucci Maritime, said in a LinkedIn post the fees that Cosco and OOCL face for a US port call, which he estimated could be as high as $8 million to $10 million, will likely prompt them to potentially reduce or even eliminate US services altogether. “COSCO and OOCL will be hit harder than other carriers,” Jensen said. “This is likely to cause a network adjustment in Ocean Alliance such that CMA CGM and Evergreen will be operating US-bound services as much as possible.” Ports America Chief Executive Matthew Leech said in another LinkedIn post that Cosco and OOCL “are more disadvantaged than other lines” by the USTR’s actions. But Leech said the Ocean Alliance has options to keep Cosco and OOCL ships busy. The two carriers could handle Ocean Alliance’s services to Europe while CMA CGM and Evergreen redeploy that capacity to US service networks. In media statements, CMA CGM said there are no plans for Cosco or OOCL to withdraw from Ocean Alliance, which lasts under its current agreement until 2032. Cosco’s statement Monday gave no indication of network changes but indicated that it would continue “offering a comprehensive range of dependable services.” Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

Cosco Shipping says new fees that Chinese carriers and ships will be forced to pay for calling the US — possibly as high as $8 million to $10 million per voyage, according to one analyst — are unfair and will “distort” the ocean shipping market. That comes as other ocean carriers grapple with the impact of the fees on freight costs and how to redraw their networks to avoid them. Cosco Shipping Corporation, the container line’s parent, said in a statement Monday that the US Trade Representative (USTR) made a “discriminatory decision” in issuing new fees against China’s maritime industry . It said the charges unveiled Friday against China-based ocean carriers and Chinese-built ships in all other fleets will put global supply chains at risk of higher costs and result in less-efficient service . “We firmly oppose the [USTR’s] accusations and the subsequent measures,” Cosco said. “Such measures not only distort fair competition and impede the normal functioning of the global shipping industry, but also threaten its stable and sustainable development.” Barring their rescission, the fees are the USTR’s final actions against China’s carriers and container ships and will take effect in October. The fees will only be charged on the first US port of call on a vessel string, unlike the per-port fee schedule in the original USTR plan. The revised per-voyage fee will be charged a maximum of five times per year on each affected vessel. Confusion on net tonnage While less draconian than the initial USTR proposal , Cosco and its Hong Kong subsidiary OOCL face fees that are three times higher than what would be charged to all other ocean carriers. The USTR said the goal of the fees is to “disincentivize” shippers from using China’s ocean carriers. Starting this October, China’s ocean carriers will have to pay $50 per net ton of a vessel arriving at US ports. The fee goes up $30 each year on the anniversary of the USTR’s actions, topping out at $140 in 2028. Ocean carriers based outside of China operating Chinese-built ships will face a fee based on either net tonnage or container volume, whichever is higher. The tonnage fee for non-Chinese carriers starts at $18, escalating to $23 by April 2026 and topping out at $33 in 2028. The per-container fee starts at $120 and rises to $153 next year and $250 in 2028. Shippers and ocean carriers told the Journal of Commerce that they are reviewing the USTR actions to estimate how the fees will flow down to freight costs. But until there’s more clarity from the USTR, the fees are best guesses at this point. The fees are based on a ship’s “net tonnage,” but the USTR’s order does not include a definition of net tonnage. According to the US Coast Guard Marine Safety Center, net tonnage refers to a ship’s internal volume for cargo and is not measured in tons similar to a ship’s deadweight. The US signed a 1969 treaty that bound it to an international convention on measuring net tonnage that is included on a ship’s documentation. However, the Coast Guard noted that there are other ways to measure net tonnage that account for different types of vessels. Data from Sea-web, a sister product of the Journal of Commerce within S&P Global, shows the net tonnage of Chinese-built ships of 12,000-TEU to 15,000-TEU capacity can range anywhere from 60,000 to 85,000. Sea-web uses the 1969 international convention on net tonnage. An executive with an independent ocean carrier told the Journal of Commerce that its US services might typically include Chinese-built ships of 8,500-TEU capacity and net tonnage of about 64,000. That would result in a total estimated fee of about $1.2 million, which would average out to approximately $275 to $300 per container, assuming the ship is full at 4,000 containers. The $300 estimate “is in the range of what we are expecting,” the source said. “But we will reshuffle our vessels to limit exposure to USTR fees, so it’s likely to be less overall,” he added. In contrast, the 13,800-TEU Cosco Shipping Rose, which calls the US East Coast, has net tonnage of 84,940. That would put its port call fee at over $4 million, equating to about $600 per container assuming it is carrying over 6,000 containers. An executive with a European alliance carrier said multiple factors make a per-container rate difficult to estimate at this point, including the fact that ships are not always arriving in port full. Net tonnage generally refers to a ship’s internal volume, but container ships also carry freight on top of their hatches. The source said the USTR fees will result in costs “probably higher” than $300 per container. Ocean Alliance in focus Whatever fees other container lines face, Cosco and OOCL face triple the costs. That has some industry watchers looking for both carriers to shuffle US services offered under the Ocean Alliance, alongside partners CMA CGM and Evergreen Marine. Thanks to their role among China’s exporters, Cosco and OOCL have the leading market share in trans-Pacific services to the US, according to data from PIERS, a sister company of the Journal of Commerce within S&P Global. Cosco and OOCL handled just over 17% of trans-Pacific imports to all US coasts during March 2025. CMA CGM came in second at 13.6%. Of Ocean Alliance’s nine direct services to the US West Coast, four are operated by Cosco and OOCL. Those include the Bohai, Hibiscus Express and Yangtse services to Long Beach and the Dahlia service to Seattle. Cosco and OOCL also supply ships to the Manhattan Bridge and South Atlantic Express services to the US East Coast and the Gulf of Mexico Express service. Lars Jensen, CEO and partner of consultancy Vespucci Maritime, said in a LinkedIn post the fees that Cosco and OOCL face for a US port call, which he estimated could be as high as $8 million to $10 million, will likely prompt them to potentially reduce or even eliminate US services altogether. “COSCO and OOCL will be hit harder than other carriers,” Jensen said. “This is likely to cause a network adjustment in Ocean Alliance such that CMA CGM and Evergreen will be operating US-bound services as much as possible.” Ports America Chief Executive Matthew Leech said in another LinkedIn post that Cosco and OOCL “are more disadvantaged than other lines” by the USTR’s actions. But Leech said the Ocean Alliance has options to keep Cosco and OOCL ships busy. The two carriers could handle Ocean Alliance’s services to Europe while CMA CGM and Evergreen redeploy that capacity to US service networks. In media statements, CMA CGM said there are no plans for Cosco or OOCL to withdraw from Ocean Alliance, which lasts under its current agreement until 2032. Cosco’s statement Monday gave no indication of network changes but indicated that it would continue “offering a comprehensive range of dependable services.” Contact Michael Angell at michael.angell@spglobal.com .

Trans-Pacific

North American ports

Container lines

Cosco slams US port fees as other carriers reckon with potential costs

<div class="phx-topic abstract-wrapper">US electronics imports are riding a wave of cyclical replacement, but tariffs could bring on an ebb tide.</div>

US electronics imports are riding a wave of cyclical replacement, but tariffs could bring on an ebb tide.

<div class="phx-topic">US electronics importers are still riding waves of replenishment after a boom in imports last year, but US tariffs are already affecting the costs consumers will pay. The Trump administration’s tariffs will challenge growth in the sector and likely raise costs for consumers despite exclusions from tariffs for several electronic products, including laptops and smartphones manufactured in China. The array of tariffs facing US trading partners has electronic manufacturers rethinking pricing and rollouts given how dependent they are on the Chinese market. The White House is considering a new tariff on products containing semiconductors, which are used in everything from automotive engines to computers and phones to the fancier range of espresso makers. The uncertainty created by proposed tariffs that remain undefined plays an even bigger part in deliberations about whether to push the “pause” button on imports or move ahead. The delayed launch of the Nintendo Switch 2 gaming console provides an early example. For a brief time, fans of Mario, Luigi and Donkey Kong thought they might have to pay more and wait longer for the new gaming console, a critical product for Kyoto, Japan-based Nintendo. The company initially scheduled pre-orders for the Switch 2 to begin on April 9 but delayed the order launch until April 24 due to uncertainty caused by the tariffs. On April 18, Nintendo said Switch 2 pricing would remain unchanged at $499.99 per unit, but prices for some accessories will be adjusted due to “changes in market conditions.” Those changes are the uncertainty of US tariffs. On April 2, President Donald Trump imposed a 24% reciprocal tariff on Japan, but that levy was suspended for 90 days on April 9. Japan, similar to most of the world, still faces a 10% baseline tariff and 25% tariffs on steel and aluminum and cars and automotive parts. Goods imported from China face a combined tariff of 145%. The tariffs threaten to short-circuit the market for containerized electronic imports, which shot up 9.4% in 2024 to reach nearly 1.8 million TEUs. That rebound after two years of declines topped the 1.7 million-TEU record set in 2021, according to PIERS, a sister product of the Journal of Commerce within S&amp;P Global. The tariffs and proposed tariffs could derail forecasts for higher electronics sales in 2025 — if consumers decide the higher retail prices aren’t worth paying. “Consumers remain very price sensitive — something that will be further amplified by uncertainty surrounding potential trade and economic disruptions,” Paul Gagnon, vice president and technology industry advisor for research company Circana, said in a statement earlier this year. <h3>‘Refresh wave’ coming </h3>Circana, formerly IRI and the NPD Group, in January forecast an additional $1.8 billion in spending on electronics, a 1.6% year-over-year gain. Computers, portable audio devices and televisions were expected to contribute 70% of the increase. Much of the increase will be driven by a “refresh wave,” Circana said, as consumers replace older electronics with more powerful personal computers and larger screen TVs. Since January, consumers have become even more price sensitive. Surveys of consumer confidence and expectations have dropped significantly, alarming economists. That refresh wave could be shallower than expected. Even so, US consumers show no sign they’re sated with electronic gadgetry, especially the computers, tablets and smartphones embedded in daily life. New products and features such as artificial intelligence capabilities may convince them to spend more. But the upper limits of their discretionary spending remain to be tested — especially when a video game console is priced at $500. <h3>China, Vietnam make gains </h3>Despite tariffs and the threat of tariffs, China remains the largest single source of US electronics imports. China even increased its share of US electronics imports in 2024, pushing it up 0.5 percentage point to 45.47%, according to data from PIERS. That figure is down substantially from 56.2% in 2019, a sign of long-term decoupling from the US market. Vietnam’s share of the US electronics market also increased 0.5 percentage point to 15.77%; back in 2019, Vietnam had a 7.19% share. The next largest source of US electronics imports, Thailand, increased its market share last year to 6.65% from 6.2% in 2023, according to the PIERS data. South Korea and Malaysia, the next largest players, saw their market share shrink slightly to 5.49% and 3.34%, respectively. The rest of the world, including Japan, saw their US market share in electronics slip to 22.3% in 2024 after rising to 22.5% in 2023, losing some share to China and Vietnam. Those figures could change in 2025 as high tariffs on Chinese products that aren’t excluded discourage the shipment, as well as the purchase, of cheaper electronics. Some of these goods, however, may be cheap enough that even tariffs won’t deter their sale. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

US electronics importers are still riding waves of replenishment after a boom in imports last year, but US tariffs are already affecting the costs consumers will pay. The Trump administration’s tariffs will challenge growth in the sector and likely raise costs for consumers despite exclusions from tariffs for several electronic products, including laptops and smartphones manufactured in China. The array of tariffs facing US trading partners has electronic manufacturers rethinking pricing and rollouts given how dependent they are on the Chinese market. The White House is considering a new tariff on products containing semiconductors, which are used in everything from automotive engines to computers and phones to the fancier range of espresso makers. The uncertainty created by proposed tariffs that remain undefined plays an even bigger part in deliberations about whether to push the “pause” button on imports or move ahead. The delayed launch of the Nintendo Switch 2 gaming console provides an early example. For a brief time, fans of Mario, Luigi and Donkey Kong thought they might have to pay more and wait longer for the new gaming console, a critical product for Kyoto, Japan-based Nintendo. The company initially scheduled pre-orders for the Switch 2 to begin on April 9 but delayed the order launch until April 24 due to uncertainty caused by the tariffs. On April 18, Nintendo said Switch 2 pricing would remain unchanged at $499.99 per unit, but prices for some accessories will be adjusted due to “changes in market conditions.” Those changes are the uncertainty of US tariffs. On April 2, President Donald Trump imposed a 24% reciprocal tariff on Japan, but that levy was suspended for 90 days on April 9. Japan, similar to most of the world, still faces a 10% baseline tariff and 25% tariffs on steel and aluminum and cars and automotive parts. Goods imported from China face a combined tariff of 145%. The tariffs threaten to short-circuit the market for containerized electronic imports, which shot up 9.4% in 2024 to reach nearly 1.8 million TEUs. That rebound after two years of declines topped the 1.7 million-TEU record set in 2021, according to PIERS, a sister product of the Journal of Commerce within S&P Global. The tariffs and proposed tariffs could derail forecasts for higher electronics sales in 2025 — if consumers decide the higher retail prices aren’t worth paying. “Consumers remain very price sensitive — something that will be further amplified by uncertainty surrounding potential trade and economic disruptions,” Paul Gagnon, vice president and technology industry advisor for research company Circana, said in a statement earlier this year. ‘Refresh wave’ coming Circana, formerly IRI and the NPD Group, in January forecast an additional $1.8 billion in spending on electronics, a 1.6% year-over-year gain. Computers, portable audio devices and televisions were expected to contribute 70% of the increase. Much of the increase will be driven by a “refresh wave,” Circana said, as consumers replace older electronics with more powerful personal computers and larger screen TVs. Since January, consumers have become even more price sensitive. Surveys of consumer confidence and expectations have dropped significantly, alarming economists. That refresh wave could be shallower than expected. Even so, US consumers show no sign they’re sated with electronic gadgetry, especially the computers, tablets and smartphones embedded in daily life. New products and features such as artificial intelligence capabilities may convince them to spend more. But the upper limits of their discretionary spending remain to be tested — especially when a video game console is priced at $500. China, Vietnam make gains Despite tariffs and the threat of tariffs, China remains the largest single source of US electronics imports. China even increased its share of US electronics imports in 2024, pushing it up 0.5 percentage point to 45.47%, according to data from PIERS. That figure is down substantially from 56.2% in 2019, a sign of long-term decoupling from the US market. Vietnam’s share of the US electronics market also increased 0.5 percentage point to 15.77%; back in 2019, Vietnam had a 7.19% share. The next largest source of US electronics imports, Thailand, increased its market share last year to 6.65% from 6.2% in 2023, according to the PIERS data. South Korea and Malaysia, the next largest players, saw their market share shrink slightly to 5.49% and 3.34%, respectively. The rest of the world, including Japan, saw their US market share in electronics slip to 22.3% in 2024 after rising to 22.5% in 2023, losing some share to China and Vietnam. Those figures could change in 2025 as high tariffs on Chinese products that aren’t excluded discourage the shipment, as well as the purchase, of cheaper electronics. Some of these goods, however, may be cheap enough that even tariffs won’t deter their sale. Contact William B. Cassidy at bill.cassidy@spglobal.com .

Maritime

Surface

Air Cargo

Supply chain

US tariffs threaten a ‘refresh wave’ of US electronics sales, imports

<div class="phx-topic abstract-wrapper">Qatar, IAG and MASkargo plan to get their trilateral partnership off the ground as soon as regulatory approval is secured.</div>

Qatar, IAG and MASkargo plan to get their trilateral partnership off the ground as soon as regulatory approval is secured.

<div class="phx-topic">Three of the world’s largest air freight airlines have formed a global cargo joint venture designed to dramatically expand networks in key markets and improve customer service levels and transit times. While few details were made available, Qatar Airways Cargo (Qatar Cargo), IAG Cargo and Malaysian Airlines’ air freight division MASkargo announced Tuesday their intention to launch a trilateral partnership that is planned to take off “in the near future,” subject to regulatory approval. “This joint business not only unlocks choice and opportunities for our customers but also enhances connectivity for the businesses and industries they serve, further strengthening the role air cargo plays in facilitating global trade,” David Shepherd, CEO of IAG Cargo, said in a joint statement. IAG is the holding company for British Airways, Iberia and Aer Lingus. Should the strategic cooperation manage to clear regulatory hurdles, it will create an enormous global network that will offer shippers more routing options, faster transit times and stronger connectivity across key markets. MASkargo has more than 100 destinations and manages cargo terminals at 11 Malaysian airports, serving over 40 carriers. Qatar Airways Cargo has 60 freighter and 170 passenger destinations, while the airlines under IAG Cargo operate out of four European hubs to 250 destinations across six continents. IAG Cargo and Qatar Cargo will gain access to the extensive Southeast Asian and Australasian network of MASkargo, while the Malaysian Airlines carrier will expand its reach into the Middle East, Gulf Cooperation Council (GCC) countries and European markets. “Today marks a significant milestone in our ongoing efforts to redefine the global air cargo landscape,” Mark Drusch, chief officer for cargo at Qatar Airways, said in the statement. MASkargo CEO Mark Jason Thomas had a similar view. “This strategic collaboration marks a pivotal moment for MASkargo and the air cargo industry,” he noted. Qatar Cargo volume grew 12.9% in 2024 while IAG Cargo volume increased 12.6% year over year. No volume figures are available for MASkargo, but the carrier has available air cargo capacity of more than 1 million tons. In parallel with the joint venture, the three carriers are working together to develop industry-leading harmonized safety and security standards for customers, according to the joint statement. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Three of the world’s largest air freight airlines have formed a global cargo joint venture designed to dramatically expand networks in key markets and improve customer service levels and transit times. While few details were made available, Qatar Airways Cargo (Qatar Cargo), IAG Cargo and Malaysian Airlines’ air freight division MASkargo announced Tuesday their intention to launch a trilateral partnership that is planned to take off “in the near future,” subject to regulatory approval. “This joint business not only unlocks choice and opportunities for our customers but also enhances connectivity for the businesses and industries they serve, further strengthening the role air cargo plays in facilitating global trade,” David Shepherd, CEO of IAG Cargo, said in a joint statement. IAG is the holding company for British Airways, Iberia and Aer Lingus. Should the strategic cooperation manage to clear regulatory hurdles, it will create an enormous global network that will offer shippers more routing options, faster transit times and stronger connectivity across key markets. MASkargo has more than 100 destinations and manages cargo terminals at 11 Malaysian airports, serving over 40 carriers. Qatar Airways Cargo has 60 freighter and 170 passenger destinations, while the airlines under IAG Cargo operate out of four European hubs to 250 destinations across six continents. IAG Cargo and Qatar Cargo will gain access to the extensive Southeast Asian and Australasian network of MASkargo, while the Malaysian Airlines carrier will expand its reach into the Middle East, Gulf Cooperation Council (GCC) countries and European markets. “Today marks a significant milestone in our ongoing efforts to redefine the global air cargo landscape,” Mark Drusch, chief officer for cargo at Qatar Airways, said in the statement. MASkargo CEO Mark Jason Thomas had a similar view. “This strategic collaboration marks a pivotal moment for MASkargo and the air cargo industry,” he noted. Qatar Cargo volume grew 12.9% in 2024 while IAG Cargo volume increased 12.6% year over year. No volume figures are available for MASkargo, but the carrier has available air cargo capacity of more than 1 million tons. In parallel with the joint venture, the three carriers are working together to develop industry-leading harmonized safety and security standards for customers, according to the joint statement. Contact Greg Knowler at greg.knowler@spglobal.com .

Air Cargo Carriers News

Three air freight majors form global alliance to expand network reach

<div class="phx-topic abstract-wrapper">But executives at both northern range hubs highlighted the extreme volatility of the first three months and the US tariff-driven uncertainty that lies ahead.</div>

But executives at both northern range hubs highlighted the extreme volatility of the first three months and the US tariff-driven uncertainty that lies ahead.

<div class="phx-topic">Antwerp-Bruges overtook Rotterdam in the first quarter to assume the mantle of Europe’s busiest container port, handling 3.43 million TEUs against its Dutch rival’s 3.36 million TEUs. While Rotterdam’s container volume in the first three months rose 2.2% year over year, throughput at the Belgian hub was up 4.5%, increasing Antwerp-Bruges’ market share in the Hamburg-Le Havre range by 0.6 percentage point to 30.5%. “These quarterly figures emphasize how valuable the complementarity between Antwerp and Zeebrugge actually is,” Dirk de Fauw, mayor of Bruges and vice president of the Port of Antwerp-Bruges board of directors, said in a statement issued by the port Tuesday. The Belgian ports of Antwerp and Zeebrugge merged in 2022 to form the Port of Antwerp-Bruges. “The combination of scale and specialization is proving itself time and again, especially in a turbulent international environment,” de Fauw noted. Executives at Antwerp-Bruges and Rotterdam highlighted in separate statements the extreme global disruption in container markets during the first quarter and the US tariff-driven uncertainty that lies ahead. “The first three months of this year were characterized by a high degree of volatility in world trade as a result of threatened import duties in the United States and conflicts in Ukraine and the Middle East,” Boudewijn Siemons, CEO of the Port of Rotterdam Authority, said in a statement. “This volatility has led to uncertainty among companies in the areas of trade and investment,” he added. “We see this reflected in throughput volumes and the willingness to invest.” <h3>Impact of US tariffs </h3>While Antwerp-Bruges said the immediate impact of the on-again, off-again US tariffs remained limited for now, it warned that further developments in trade tariffs would impact the logistics chain in the coming months. But how significant that impact could be was difficult to predict, said Jacques Vandermeiren, the port’s CEO. “We are in particularly uncertain times,” he noted in the first-quarter results statement, adding that stability was critical, both for the port’s customers and for the broader economy. “At the same time, the protectionist measures taken by the US make it clear that Europe needs to make a stronger commitment to robust economic policies in order to strengthen our industry and anchor its strategic position,” Vandermeiren noted. On March 12, the US applied a 25% tariff to iron, steel, aluminum and derived products from around the world. On April 3, that was extended to include cars and car parts, also at 25%, with an additional 20% increase on goods originating from the European Union. Then on April 9, the Trump administration announced a 90-day temporary pause for countries open to negotiations, leaving the 10% across-the-board baseline tariff on Europe in place during the negotiating period. The European Union has also suspended its reciprocal tariffs on US exports such as Harley-Davidson motorcycles, bourbon whiskey and boats. A second phase of tariffs due to take effect April 15 has also been suspended for the 90-day period. Europe’s hub ports are <a href="https://www.joc.com/article/early-signs-of-rising-tariff-driven-demand-emerge-on-the-trans-atlantic-5986678">watching the trans-Atlantic trade for signs of frontloading</a> as shippers take advantage of the 90-day window to advance orders, but so far, they have not seen any significant increase in demand. Rotterdam’s trans-Atlantic volume plunged 23.1% in the first quarter compared with the same period last year. However, the port said this was not tariff-related but rather a result of two shipping services being shifted to other ports because of limited capacity at terminals that experienced significant congestion for much of the quarter. In terms of total tonnage, Rotterdam’s first-quarter throughput declined 1.1% year over year, driven by an 8.1% decrease in the export of full containers, according to the port statement. Export containers are heavier, which means the average weight per container is lower. Of immediate concern to Europe, however, are Chinese imports. The European Commission is <a href="https://www.joc.com/article/europe-on-alert-to-track-any-wave-of-diverted-chinese-imports-5986038">closely monitoring containerized imports from China</a> amid growing fears that the high US tariffs will force a redirection of trans-Pacific trade flows and flood Europe with Chinese goods. <h3>Undermining industrial competitiveness </h3>Antwerp-Bruges highlighted the deeper challenges facing the European economy, with the industrial sector struggling with structural problems that are “seriously undermining its competitiveness.” These included high energy and production costs, global overcapacity and increasing competition from cheap imports from Asia and elsewhere that were putting pressure on the sector. On top of the structural issues, Antwerp-Bruges highlighted complex regulations, slow permitting processes and high labor costs that were interfering with the willingness of businesses to invest. “Port of Antwerp-Bruges and Port of Rotterdam are therefore pleading for a rapid implementation of the Clean Industrial Deal in the form of concrete measures and sufficient budgetary support to restore resilience and future prospects for European industry,” the Antwerp-Bruges statement noted. The Clean Industrial Deal unveiled in February is a measure through which the European Commission intends to strengthen the competitiveness of European industry. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

Antwerp-Bruges overtook Rotterdam in the first quarter to assume the mantle of Europe’s busiest container port, handling 3.43 million TEUs against its Dutch rival’s 3.36 million TEUs. While Rotterdam’s container volume in the first three months rose 2.2% year over year, throughput at the Belgian hub was up 4.5%, increasing Antwerp-Bruges’ market share in the Hamburg-Le Havre range by 0.6 percentage point to 30.5%. “These quarterly figures emphasize how valuable the complementarity between Antwerp and Zeebrugge actually is,” Dirk de Fauw, mayor of Bruges and vice president of the Port of Antwerp-Bruges board of directors, said in a statement issued by the port Tuesday. The Belgian ports of Antwerp and Zeebrugge merged in 2022 to form the Port of Antwerp-Bruges. “The combination of scale and specialization is proving itself time and again, especially in a turbulent international environment,” de Fauw noted. Executives at Antwerp-Bruges and Rotterdam highlighted in separate statements the extreme global disruption in container markets during the first quarter and the US tariff-driven uncertainty that lies ahead. “The first three months of this year were characterized by a high degree of volatility in world trade as a result of threatened import duties in the United States and conflicts in Ukraine and the Middle East,” Boudewijn Siemons, CEO of the Port of Rotterdam Authority, said in a statement. “This volatility has led to uncertainty among companies in the areas of trade and investment,” he added. “We see this reflected in throughput volumes and the willingness to invest.” Impact of US tariffs While Antwerp-Bruges said the immediate impact of the on-again, off-again US tariffs remained limited for now, it warned that further developments in trade tariffs would impact the logistics chain in the coming months. But how significant that impact could be was difficult to predict, said Jacques Vandermeiren, the port’s CEO. “We are in particularly uncertain times,” he noted in the first-quarter results statement, adding that stability was critical, both for the port’s customers and for the broader economy. “At the same time, the protectionist measures taken by the US make it clear that Europe needs to make a stronger commitment to robust economic policies in order to strengthen our industry and anchor its strategic position,” Vandermeiren noted. On March 12, the US applied a 25% tariff to iron, steel, aluminum and derived products from around the world. On April 3, that was extended to include cars and car parts, also at 25%, with an additional 20% increase on goods originating from the European Union. Then on April 9, the Trump administration announced a 90-day temporary pause for countries open to negotiations, leaving the 10% across-the-board baseline tariff on Europe in place during the negotiating period. The European Union has also suspended its reciprocal tariffs on US exports such as Harley-Davidson motorcycles, bourbon whiskey and boats. A second phase of tariffs due to take effect April 15 has also been suspended for the 90-day period. Europe’s hub ports are watching the trans-Atlantic trade for signs of frontloading as shippers take advantage of the 90-day window to advance orders, but so far, they have not seen any significant increase in demand. Rotterdam’s trans-Atlantic volume plunged 23.1% in the first quarter compared with the same period last year. However, the port said this was not tariff-related but rather a result of two shipping services being shifted to other ports because of limited capacity at terminals that experienced significant congestion for much of the quarter. In terms of total tonnage, Rotterdam’s first-quarter throughput declined 1.1% year over year, driven by an 8.1% decrease in the export of full containers, according to the port statement. Export containers are heavier, which means the average weight per container is lower. Of immediate concern to Europe, however, are Chinese imports. The European Commission is closely monitoring containerized imports from China amid growing fears that the high US tariffs will force a redirection of trans-Pacific trade flows and flood Europe with Chinese goods. Undermining industrial competitiveness Antwerp-Bruges highlighted the deeper challenges facing the European economy, with the industrial sector struggling with structural problems that are “seriously undermining its competitiveness.” These included high energy and production costs, global overcapacity and increasing competition from cheap imports from Asia and elsewhere that were putting pressure on the sector. On top of the structural issues, Antwerp-Bruges highlighted complex regulations, slow permitting processes and high labor costs that were interfering with the willingness of businesses to invest. “Port of Antwerp-Bruges and Port of Rotterdam are therefore pleading for a rapid implementation of the Clean Industrial Deal in the form of concrete measures and sufficient budgetary support to restore resilience and future prospects for European industry,” the Antwerp-Bruges statement noted. The Clean Industrial Deal unveiled in February is a measure through which the European Commission intends to strengthen the competitiveness of European industry. Contact Greg Knowler at greg.knowler@spglobal.com .

Trans-Atlantic

Asia-Europe

International ports

Antwerp-Bruges passes Rotterdam to become Europe’s busiest box port

<div class="phx-topic abstract-wrapper">Disruption caused by trade wars will reach deep into global supply chains, depressing an already uncertain outlook for the US freight economy. </div>

Disruption caused by trade wars will reach deep into global supply chains, depressing an already uncertain outlook for the US freight economy.

<div class="phx-topic">The tailwinds that brought a strong increase in US imports and certain exports last year have turned to cold, hard headwinds this year as disruptions caused by the Trump administration’s tariffs take root and multiply. The shock waves from those tariffs are rippling from ports in Asia and Europe through freight docks deep in industrial America. The latest shock came from the US Trade Representative (USTR), which said April 18 it will <a href="https://www.joc.com/article/scaled-back-ustr-port-tariff-to-hit-chinese-carriers-hardest-5987549">charge entrance fees for China-based ocean carriers</a> and lines operating Chinese-built ships calling at US ports based on cargo capacity or container volume. Given the chaotic rollout of President Donald Trump’s trade policies, the outlook for the US freight economy in the second half of 2025 isn’t just cloudy — it’s reached a point of uncertainty that is crippling shippers’ ability to plan. US shippers “are waiting for the dust to settle to determine how tariffs might influence and change their short- and long-term business strategies,” Spencer Frazier, executive vice president of sales at J.B. Hunt Transport Services, said during an earnings call April 15. S&amp;P Global, the parent company of the Journal of Commerce, in April pulled down its US GDP growth forecasts for 2025 and 2026 from 1.9% in both years to 1.3% and 1.5%, respectively, thanks in part to expectations that tariffs will result in higher inflation. Although the risk of a recession in the US has diminished, US policy volatility and related economic uncertainties are likely to linger into the year, S&amp;P Global said. On land, the so-called freight recession that began in 2022, sending trucking and intermodal rates tumbling by double-digit percentages, is entering its fourth consecutive year. Shippers will maintain pricing power in the truckload and intermodal rail segments in 2025, but they’re also going to make, ship and sell less. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="9fd84e22-d76c-4e34-8c52-c038bd25ad91"></dynamic-object></div>Despite an uptick in truckload spot rates early this year, led by flatbed spot rates, truckload pricing is still bouncing along a bottom it reached in 2023. Less-than-truckload (LTL) pricing has been elevated since the collapse of Yellow in 2023, but volumes remain essentially flat aside from some tariff-driven frontloading. The question isn’t whether trucking volumes will decline in the second quarter or second half of 2025, but by how much. That may trigger a broader loss of truck capacity. <h3>Blanking and canceling </h3>On the seas, the Trump administration’s multi-front trade war has already led to a drop in shipments, compounding the disruption caused by attacks on shipping in the Red Sea, where the US is escalating attacks on Houthis in Yemen. Ocean freight rates have fallen steeply in the first four months of 2025. Average spot pricing from Asia to the US West Coast of $2,050 per FEU in the week of April 18 was down 61% from the beginning of the year and 74.8% from its most recent peak in July 2024, according to Platts, a sister product of the Journal of Commerce within S&amp;P Global. Asia-US East Coast spot rates have sunk 53.7% since Jan. 1 and 69.4% from last summer to $3,100 per FEU. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="cbb65e03-1d9b-43c6-97ee-0afa0e7dfc1d"></dynamic-object></div>A slew of booking cancellations by US importers is leading ocean carriers to <a href="https://www.joc.com/article/trans-pacific-blank-sailings-set-to-rise-after-china-bookings-drop-sharply-5984166">blank more voyages</a> in the eastbound trans-Pacific. Some ships are leaving China half-empty. The scale-back in US-bound imports from China is affecting the entire ocean carrier industry. “People are canceling and putting cargo [from] China on pause,” a source at a trans-Pacific container line who asked not to be identified told the Journal of Commerce in April. The broad pause in bookings and orders extends beyond China to other sourcing origins. Amazon, for example, has canceled orders of goods ranging from beach chairs and scooters to air conditioners from Vietnam and Thailand, as well as China, according to a report from Bloomberg. Retailer Five Below paused orders from China in April as those tariffs escalated, CFO Kristy Chipman told analysts during a March 19 call. “The breadth and magnitude of the tariffs are significant given that approximately 60% of our total cost of goods are imported from China, either directly or through our domestic vendors,” Chipman said. Trans-Pacific air cargo traffic, meanwhile, is expected to increase through May 2 as importers rush to beat the end of the exclusion from tariffs for low-value imports. After that final spurt of frontloading, tariffs and the loss of the de minimis exemption for shipments from China and Hong Kong are expected to <a href="https://www.joc.com/article/prepare-for-period-of-panic-in-trans-pacific-air-cargo-market-tiaca-5978829">drag on demand</a>. Limited blank sailings have been announced on the trans-Atlantic trade in the coming weeks, with just 7,124 TEUs from North Europe to the US East and Gulf coasts <a href="https://www.joc.com/article/early-signs-of-rising-tariff-driven-demand-emerge-on-the-trans-atlantic-5986678">scheduled to be withdrawn</a> in May, according to maritime data provider eeSea. “It seems as if carriers are pushing up capacity to cater for whatever frontloading may be needed by European exporters,” said Peter Sand, chief analyst at rate benchmarking platform Xeneta. <h3>A bubble about to burst </h3>In 2024, containerized US imports jumped 15.3% to 27.7 million TEUs, while exports rose 0.9% to 11.3 million TEUs, according to PIERS, also part of S&amp;P Global. Manufactured goods, machinery and mechanical products and minerals rode atop the wave of imports, spiking 17.6%, 14.8% and 11.4%, respectively. Goods were still pouring into the US in the first three months of 2025, with container imports rising 9.2% year over year, according to PIERS, but retailers say the import wave is collapsing as the race to beat the US tariffs ends. The Global Port Tracker report, produced by the National Retail Federation (NRF) and Hackett Associates, forecasts imports to plunge 20.5% in May, 26.6% in June, 27% in July and 26.7% in August. “At present, we expect to see imports begin to decline by May and that they will drop dramatically during the remainder of the year,” Hackett Associates Founder Ben Hackett said in the April Global Port Tracker report. The NRF and Hackett project inbound container shipments will fall 20% in the second half from the year-ago period, which would result in a full-year decline of 15% or more, approximately equal to last year’s gain. Exporters are feeling the effects of tariffs, too, especially those shipping <a href="https://www.joc.com/article/uncertain-trade-environment-especially-fraught-for-us-ag-shippers-5987561">US agricultural and forestry products</a>. China, the largest US market for those products, levied a 125% tariff on them in retaliation for new US tariffs. Bookings for US exports to China for the week of April 15 <a href="https://www.joc.com/article/us-exporters-see-rise-in-canceled-orders-from-chinese-buyers-amid-trade-war-5986165">were down 5.4%</a> from the prior week at 17,220 TEUs, according to maritime visibility provider Vizion and data and analytics company Dun &amp; Bradstreet. “In [the] short term, I think we’re going to see a lot of agriculture exporting shift [from China] to other countries,” Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said in an interview with the Journal of Commerce. A drop in the value of the US dollar — down about 5% against other major world currencies after April’s tariff announcements — could help exporters sell goods overseas, but retaliatory tariffs and backlash among foreign consumers will likely dampen any currency gains. Such backlash has already occurred in Canada, where retailers have withdrawn American-made items from whiskey to diapers from their shelves. <h3>Manufacturing losing momentum </h3>Fewer US imports mean fewer intermodal containers moving inland to Chicago or Dallas and fewer truckload and LTL shipments. But a continued decline in US factory output will have an even greater impact on demand for trucking and rail services. Almost 60% of US truck tonnage is tied to industrial output, according to US Census Bureau data. North America manufacturing output fell at one of the steepest rates seen in the past two years in March, according to S&amp;P Global, with broad-based production losses in the US, Canada and Mexico. The US Manufacturing Purchasing Managers’ Index (PMI) from S&amp;P Global dropped to 50.2 in March from 52.7 in February and 51.2 in January. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="e4bcb827-f97b-43d7-a4df-83a0b6ac9b48"></dynamic-object></div>Optimism surrounding the Trump administration and the need to “front run” tariffs buoyed manufacturers in the first two months of the year, but “cracks are now starting to appear,” S&amp;P Global said in its PMI release in April. The longer trade disputes last, the more US manufacturers will have difficulty finding specific components, including some that are critical to production, said Michael Regan, chief relationship officer at logistics company and shipper consultant TranzAct Technologies, citing Chinese-made magnets used in automotive transmissions as an example. “These are ‘dirty magnets’ produced from rare earth metals, and China is limiting their export,” Regan told the Journal of Commerce in mid-April. “A company I know has enough inventory to last only through July.” <h3>Resilient, but worried </h3>US consumer spending has been relatively steadfast so far this year, supported by continued wage increases and low unemployment. US retail sales grew 1.4% month over month in March, the biggest monthly increase since January 2023. Excluding sales of cars and trucks and automotive parts, retail sales only rose 0.5% from February, according to US Census Bureau data. But those results fly in the face of consumer sentiment. The University of Michigan Index of Consumer Sentiment dropped 11% sequentially in April, its fourth consecutive monthly decline. The Conference Board’s monthly index of consumer expectations dropped 9.6 points in March to 65.2, its lowest level in 12 years and far below the threshold of 80 that usually signals a recession ahead. Unlike in 2024, the consumer “is not feeling great,” NRF Chief Economist Jack Kleinhenz said in a statement in mid-April, but the NRF still expects US retail sales to rise this year with or without tariffs. The retailers’ association forecasts retail sales will grow between 2.7% and 3.7% year over year to between $5.42 trillion and $5.48 trillion. What’s more, there’s no expectation the disputes will end in the near future, and even if they do, damage has already been done that will take time to repair. The Trump administration’s goals, whether achievable or not, are part of a long-term strategy that is likely to survive weekly or even daily policy flips. As long as tariff uncertainty and trade wars linger, however, it will be more difficult to find a catalyst that will increase freight demand in the US. That’s pushing hopes for a freight recovery farther into 2026. Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>. Journal of Commerce editors Ari Ashe, Greg Knowler, Bill Mongelluzzo and Laura Robb contributed to this report, along with Research Analyst Cathy Morrow Roberson. </div>

The tailwinds that brought a strong increase in US imports and certain exports last year have turned to cold, hard headwinds this year as disruptions caused by the Trump administration’s tariffs take root and multiply. The shock waves from those tariffs are rippling from ports in Asia and Europe through freight docks deep in industrial America. The latest shock came from the US Trade Representative (USTR), which said April 18 it will charge entrance fees for China-based ocean carriers and lines operating Chinese-built ships calling at US ports based on cargo capacity or container volume. Given the chaotic rollout of President Donald Trump’s trade policies, the outlook for the US freight economy in the second half of 2025 isn’t just cloudy — it’s reached a point of uncertainty that is crippling shippers’ ability to plan. US shippers “are waiting for the dust to settle to determine how tariffs might influence and change their short- and long-term business strategies,” Spencer Frazier, executive vice president of sales at J.B. Hunt Transport Services, said during an earnings call April 15. S&P Global, the parent company of the Journal of Commerce, in April pulled down its US GDP growth forecasts for 2025 and 2026 from 1.9% in both years to 1.3% and 1.5%, respectively, thanks in part to expectations that tariffs will result in higher inflation. Although the risk of a recession in the US has diminished, US policy volatility and related economic uncertainties are likely to linger into the year, S&P Global said. On land, the so-called freight recession that began in 2022, sending trucking and intermodal rates tumbling by double-digit percentages, is entering its fourth consecutive year. Shippers will maintain pricing power in the truckload and intermodal rail segments in 2025, but they’re also going to make, ship and sell less. Despite an uptick in truckload spot rates early this year, led by flatbed spot rates, truckload pricing is still bouncing along a bottom it reached in 2023. Less-than-truckload (LTL) pricing has been elevated since the collapse of Yellow in 2023, but volumes remain essentially flat aside from some tariff-driven frontloading. The question isn’t whether trucking volumes will decline in the second quarter or second half of 2025, but by how much. That may trigger a broader loss of truck capacity. Blanking and canceling On the seas, the Trump administration’s multi-front trade war has already led to a drop in shipments, compounding the disruption caused by attacks on shipping in the Red Sea, where the US is escalating attacks on Houthis in Yemen. Ocean freight rates have fallen steeply in the first four months of 2025. Average spot pricing from Asia to the US West Coast of $2,050 per FEU in the week of April 18 was down 61% from the beginning of the year and 74.8% from its most recent peak in July 2024, according to Platts, a sister product of the Journal of Commerce within S&P Global. Asia-US East Coast spot rates have sunk 53.7% since Jan. 1 and 69.4% from last summer to $3,100 per FEU. A slew of booking cancellations by US importers is leading ocean carriers to blank more voyages in the eastbound trans-Pacific. Some ships are leaving China half-empty. The scale-back in US-bound imports from China is affecting the entire ocean carrier industry. “People are canceling and putting cargo [from] China on pause,” a source at a trans-Pacific container line who asked not to be identified told the Journal of Commerce in April. The broad pause in bookings and orders extends beyond China to other sourcing origins. Amazon, for example, has canceled orders of goods ranging from beach chairs and scooters to air conditioners from Vietnam and Thailand, as well as China, according to a report from Bloomberg. Retailer Five Below paused orders from China in April as those tariffs escalated, CFO Kristy Chipman told analysts during a March 19 call. “The breadth and magnitude of the tariffs are significant given that approximately 60% of our total cost of goods are imported from China, either directly or through our domestic vendors,” Chipman said. Trans-Pacific air cargo traffic, meanwhile, is expected to increase through May 2 as importers rush to beat the end of the exclusion from tariffs for low-value imports. After that final spurt of frontloading, tariffs and the loss of the de minimis exemption for shipments from China and Hong Kong are expected to drag on demand . Limited blank sailings have been announced on the trans-Atlantic trade in the coming weeks, with just 7,124 TEUs from North Europe to the US East and Gulf coasts scheduled to be withdrawn in May, according to maritime data provider eeSea. “It seems as if carriers are pushing up capacity to cater for whatever frontloading may be needed by European exporters,” said Peter Sand, chief analyst at rate benchmarking platform Xeneta. A bubble about to burst In 2024, containerized US imports jumped 15.3% to 27.7 million TEUs, while exports rose 0.9% to 11.3 million TEUs, according to PIERS, also part of S&P Global. Manufactured goods, machinery and mechanical products and minerals rode atop the wave of imports, spiking 17.6%, 14.8% and 11.4%, respectively. Goods were still pouring into the US in the first three months of 2025, with container imports rising 9.2% year over year, according to PIERS, but retailers say the import wave is collapsing as the race to beat the US tariffs ends. The Global Port Tracker report, produced by the National Retail Federation (NRF) and Hackett Associates, forecasts imports to plunge 20.5% in May, 26.6% in June, 27% in July and 26.7% in August. “At present, we expect to see imports begin to decline by May and that they will drop dramatically during the remainder of the year,” Hackett Associates Founder Ben Hackett said in the April Global Port Tracker report. The NRF and Hackett project inbound container shipments will fall 20% in the second half from the year-ago period, which would result in a full-year decline of 15% or more, approximately equal to last year’s gain. Exporters are feeling the effects of tariffs, too, especially those shipping US agricultural and forestry products . China, the largest US market for those products, levied a 125% tariff on them in retaliation for new US tariffs. Bookings for US exports to China for the week of April 15 were down 5.4% from the prior week at 17,220 TEUs, according to maritime visibility provider Vizion and data and analytics company Dun & Bradstreet. “In [the] short term, I think we’re going to see a lot of agriculture exporting shift [from China] to other countries,” Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC), said in an interview with the Journal of Commerce. A drop in the value of the US dollar — down about 5% against other major world currencies after April’s tariff announcements — could help exporters sell goods overseas, but retaliatory tariffs and backlash among foreign consumers will likely dampen any currency gains. Such backlash has already occurred in Canada, where retailers have withdrawn American-made items from whiskey to diapers from their shelves. Manufacturing losing momentum Fewer US imports mean fewer intermodal containers moving inland to Chicago or Dallas and fewer truckload and LTL shipments. But a continued decline in US factory output will have an even greater impact on demand for trucking and rail services. Almost 60% of US truck tonnage is tied to industrial output, according to US Census Bureau data. North America manufacturing output fell at one of the steepest rates seen in the past two years in March, according to S&P Global, with broad-based production losses in the US, Canada and Mexico. The US Manufacturing Purchasing Managers’ Index (PMI) from S&P Global dropped to 50.2 in March from 52.7 in February and 51.2 in January. Optimism surrounding the Trump administration and the need to “front run” tariffs buoyed manufacturers in the first two months of the year, but “cracks are now starting to appear,” S&P Global said in its PMI release in April. The longer trade disputes last, the more US manufacturers will have difficulty finding specific components, including some that are critical to production, said Michael Regan, chief relationship officer at logistics company and shipper consultant TranzAct Technologies, citing Chinese-made magnets used in automotive transmissions as an example. “These are ‘dirty magnets’ produced from rare earth metals, and China is limiting their export,” Regan told the Journal of Commerce in mid-April. “A company I know has enough inventory to last only through July.” Resilient, but worried US consumer spending has been relatively steadfast so far this year, supported by continued wage increases and low unemployment. US retail sales grew 1.4% month over month in March, the biggest monthly increase since January 2023. Excluding sales of cars and trucks and automotive parts, retail sales only rose 0.5% from February, according to US Census Bureau data. But those results fly in the face of consumer sentiment. The University of Michigan Index of Consumer Sentiment dropped 11% sequentially in April, its fourth consecutive monthly decline. The Conference Board’s monthly index of consumer expectations dropped 9.6 points in March to 65.2, its lowest level in 12 years and far below the threshold of 80 that usually signals a recession ahead. Unlike in 2024, the consumer “is not feeling great,” NRF Chief Economist Jack Kleinhenz said in a statement in mid-April, but the NRF still expects US retail sales to rise this year with or without tariffs. The retailers’ association forecasts retail sales will grow between 2.7% and 3.7% year over year to between $5.42 trillion and $5.48 trillion. What’s more, there’s no expectation the disputes will end in the near future, and even if they do, damage has already been done that will take time to repair. The Trump administration’s goals, whether achievable or not, are part of a long-term strategy that is likely to survive weekly or even daily policy flips. As long as tariff uncertainty and trade wars linger, however, it will be more difficult to find a catalyst that will increase freight demand in the US. That’s pushing hopes for a freight recovery farther into 2026. Contact William B. Cassidy at bill.cassidy@spglobal.com . Journal of Commerce editors Ari Ashe, Greg Knowler, Bill Mongelluzzo and Laura Robb contributed to this report, along with Research Analyst Cathy Morrow Roberson.

Tariff-related disruption spreading as US shippers ‘pause’ plans

<div class="phx-topic abstract-wrapper">The increase in blank sailings coincides with the Port of Los Angeles’ expectation that container volumes will plunge 14% month over month in week 18 and 38.6% in week 19.</div>

The increase in blank sailings coincides with the Port of Los Angeles’ expectation that container volumes will plunge 14% month over month in week 18 and 38.6% in week 19.

<div class="phx-topic">Correction: An earlier version of this story incorrectly misattributed April blank sailing data to Sea-Intelligence Maritime Analysis. The Journal of Commerce apologizes for the error.Container lines are increasingly blanking trans-Pacific as US importers are increasingly canceling or suspending orders due to tariff increases that have made some business infeasible. The escalation in blank sailings in the last two weeks has been “staggering,” giving a glimpse of just how sharp the decline could be next month, said Sea-Intelligence Maritime Analysis CEO Alan Murphy. Based on the removal of functional capacity, “carriers now clearly anticipate container demand in week 18 to be 28% lower than expected, and on Asia-North America East Coast in week 19, they now expect shippers to move as much as 42% less cargo than anticipated,” Murphy wrote in the analyst’s Sunday Spotlight newsletter. The increase in blank sailings coincides with the Port of Los Angeles’ expectation that container volumes will plunge 14% month over month in week 18 and 38.6% in week 19, respectively, according to the port’s forecasting tool. In the first full week of May, volumes through the country’s largest import gateway are projected to plummet 43% year over year. Forwarders say bookings from Southeast Asia to the US have held up better than those for shipments from China, presumably thanks to the 90-day suspension of significantly higher tariffs on goods sourced from Vietnam and Cambodia. Imports from those countries now face a 10% tariff, rather than the initially announced duties of 46% and 49%, respectively. Weekly bookings for shipments from China have plunged 37% since March 31, while bookings for Southeast Asian imports from have risen 10%, according to a Monday analysis of data from maritime visibility provider Vizion and analytics firm Dun &amp; Bradstreet. Earlier this month, US retailers slashed their outlook for US imports in the second quarter and the second half, warning that volumes would fall by more than 20% on an annual basis in every month from May through August. <h3>‘Consolidating’ services </h3>Container lines have yet to outright cancel container services, however, choosing instead to blank sailings and skip individual port calls. Taiwan-based Evergreen Marine, which operates the Hangzhou Bay Bridge (HBB) service as part of the Ocean Alliance, has canceled sailings for four straight weeks into Los Angeles and Oakland, removing 8,000 TEUs to 12,000 TEUs of weekly capacity. South Korea, which is serviced on HBB’s call at Busan, reported a 5% drop in exports during the first 20 days of April, following the release of Trump’s reciprocal tariffs. Ocean Alliance’s Bohai service, operated by Cosco Shipping, will cancel a China departure for Long Beach in the first week of May, according to vessel schedules, removing 10,000 TEUs of capacity during that time. Ocean Alliance’s Hibiscus Express and Yangtze services are also expected to blank one weekly departure each from China. A US-based executive with an independent ocean carrier who asked not to be identified said that while they have not yet seen further cancellations of their China bookings, there will likely be fewer China port calls as carriers prepare for lower volumes. “We have not seen an increase in cancellations, but the market is still soft,” he told the Journal of Commerce. “It’s likely that carriers will start to consolidate their China services in the short term.” While services may be outright canceled, there appears to be some withdrawal of vessels in the trans-Pacific trade. The 8,500-TEU Cosco Thailand, part of the Pacific South China Express Service operated by OOCL, appears to have been removed from the service’s schedule for May, along with the 8,800-TEU OOCL Utah. Following its voyage back to China, the Cosco Thailand will start calling Mexico’s West Coast ports in late June, according to the vessel’s schedule. The withdrawals effectively leave the 8,063-TEU OOCL Southampton as the only nominated ship in the service, which will require it to only offer a once-a-month service from Asia. <h3>Then, and now </h3>Approximately five years ago, when volumes plunged 62% from February to March, imports from Asia came roaring back and demand remained at historic highs for two years. This time around, however, there’s less reason to expect a similar rebound given the high level of uncertainty around US tariffs — now 145% on imports from China — and months of frontloading in anticipation of the higher duties. Various US retailers tell the Journal of Commerce that they’ve got as much as three and a half months of core inventory, allowing logistics managers to see if President Donald Trump reduces tariff levels or adds exemptions. Some shippers are moving inventory into bonded warehouses to avoid paying tariffs, betting that the severity of US tariffs can’t last more than a few months. Senior Editors Bill Mongelluzzo and Michael Angell and associate editor Laura Robb contributed to this report. Contact Mark Szakonyi at <a href="mark.szakonyi@spglobal.com">mark.szakonyi@spglobal.com</a>. </div>

Correction: An earlier version of this story incorrectly misattributed April blank sailing data to Sea-Intelligence Maritime Analysis. The Journal of Commerce apologizes for the error. Container lines are increasingly blanking trans-Pacific as US importers are increasingly canceling or suspending orders due to tariff increases that have made some business infeasible. The escalation in blank sailings in the last two weeks has been “staggering,” giving a glimpse of just how sharp the decline could be next month, said Sea-Intelligence Maritime Analysis CEO Alan Murphy. Based on the removal of functional capacity, “carriers now clearly anticipate container demand in week 18 to be 28% lower than expected, and on Asia-North America East Coast in week 19, they now expect shippers to move as much as 42% less cargo than anticipated,” Murphy wrote in the analyst’s Sunday Spotlight newsletter. The increase in blank sailings coincides with the Port of Los Angeles’ expectation that container volumes will plunge 14% month over month in week 18 and 38.6% in week 19, respectively, according to the port’s forecasting tool. In the first full week of May, volumes through the country’s largest import gateway are projected to plummet 43% year over year. Forwarders say bookings from Southeast Asia to the US have held up better than those for shipments from China, presumably thanks to the 90-day suspension of significantly higher tariffs on goods sourced from Vietnam and Cambodia. Imports from those countries now face a 10% tariff, rather than the initially announced duties of 46% and 49%, respectively. Weekly bookings for shipments from China have plunged 37% since March 31, while bookings for Southeast Asian imports from have risen 10%, according to a Monday analysis of data from maritime visibility provider Vizion and analytics firm Dun & Bradstreet. Earlier this month, US retailers slashed their outlook for US imports in the second quarter and the second half, warning that volumes would fall by more than 20% on an annual basis in every month from May through August. ‘Consolidating’ services Container lines have yet to outright cancel container services, however, choosing instead to blank sailings and skip individual port calls. Taiwan-based Evergreen Marine, which operates the Hangzhou Bay Bridge (HBB) service as part of the Ocean Alliance, has canceled sailings for four straight weeks into Los Angeles and Oakland, removing 8,000 TEUs to 12,000 TEUs of weekly capacity. South Korea, which is serviced on HBB’s call at Busan, reported a 5% drop in exports during the first 20 days of April, following the release of Trump’s reciprocal tariffs. Ocean Alliance’s Bohai service, operated by Cosco Shipping, will cancel a China departure for Long Beach in the first week of May, according to vessel schedules, removing 10,000 TEUs of capacity during that time. Ocean Alliance’s Hibiscus Express and Yangtze services are also expected to blank one weekly departure each from China. A US-based executive with an independent ocean carrier who asked not to be identified said that while they have not yet seen further cancellations of their China bookings, there will likely be fewer China port calls as carriers prepare for lower volumes. “We have not seen an increase in cancellations, but the market is still soft,” he told the Journal of Commerce. “It’s likely that carriers will start to consolidate their China services in the short term.” While services may be outright canceled, there appears to be some withdrawal of vessels in the trans-Pacific trade. The 8,500-TEU Cosco Thailand, part of the Pacific South China Express Service operated by OOCL, appears to have been removed from the service’s schedule for May, along with the 8,800-TEU OOCL Utah. Following its voyage back to China, the Cosco Thailand will start calling Mexico’s West Coast ports in late June, according to the vessel’s schedule. The withdrawals effectively leave the 8,063-TEU OOCL Southampton as the only nominated ship in the service, which will require it to only offer a once-a-month service from Asia. Then, and now Approximately five years ago, when volumes plunged 62% from February to March, imports from Asia came roaring back and demand remained at historic highs for two years. This time around, however, there’s less reason to expect a similar rebound given the high level of uncertainty around US tariffs — now 145% on imports from China — and months of frontloading in anticipation of the higher duties. Various US retailers tell the Journal of Commerce that they’ve got as much as three and a half months of core inventory, allowing logistics managers to see if President Donald Trump reduces tariff levels or adds exemptions. Some shippers are moving inventory into bonded warehouses to avoid paying tariffs, betting that the severity of US tariffs can’t last more than a few months. Senior Editors Bill Mongelluzzo and Michael Angell and associate editor Laura Robb contributed to this report. Contact Mark Szakonyi at mark.szakonyi@spglobal.com .

Container Shipping News

Port News

Asia-US blank sailing forecast for May increasing amid cancellations

<div class="phx-topic abstract-wrapper">There is widespread recognition that the industry has been caught in the jaws of a historically unprecedented freight recession — rate deflation accompanied by cost inflation — and if carriers are to return to historical levels of profitability, there is a need for rate and volume increases to deliver top-line growth. </div>

There is widespread recognition that the industry has been caught in the jaws of a historically unprecedented freight recession — rate deflation accompanied by cost inflation — and if carriers are to return to historical levels of profitability, there is a need for rate and volume increases to deliver top-line growth.

<div class="phx-topic">The surface freight transportation industry is now pinning its hope on economic recovery — for the third straight year — on an expected recovery in the second half of the year. The industry consensus calls for incremental improvement in truckload rates driven by gradual improvement in sector fundamentals throughout the year. Nevertheless, the most recent results of many public truckload stocks have been sobering. Although some carriers observed some “green shoots” during peak season, post-election gains have been given back — and then some. Multiples are below historic norms, and fleet sizes continue to contract — despite several years of shrinkage. There is widespread recognition that the industry has been caught in the jaws of a historically unprecedented freight recession caused by rate deflation accompanied by cost inflation. If carriers are to return to historical levels of profitability, there is a need for rate and volume increases to deliver top-line growth. To analyze this dichotomy, I utilized “An Analysis of the Operational Cost of Trucking: 2024 Update.” Prepared by the American Transportation Research Institute (ATRI), this annual report casts a wide net in respondent type, size and operating model; provides historical context for almost the past 20 years and is remarkably transparent when compared with other self-anointed experts. The first chart explains this difference by looking at two distinct metrics: driver cost per hour and fuel cost per mile. Fuel costs have deviated wildly over this period, whereas driver cost has been steadily increasing. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="b372d175-2a73-40b7-83a0-f350f63093d1"></dynamic-object></div>Nevertheless, in an environment where trucking costs are on an inexorable inflationary arc, how have rates remained so depressed? I believe that the issue is that the trucking market is less “free” since the COVID-19 pandemic. A free market exists when supply and demand (through “voluntary exchange”) determine economic outcomes. Buyers and sellers are free to trade goods and services free of governmental intervention or market dominance by one side: monopoly, oligopoly or monopsony. A free market also requires the freedom of firms to enter that market because there are no barriers of entry. Since deregulation, the truckload market has had this freedom. However, market freedom also permits firms to freely depart from the market without any barriers to exit. This has not necessarily been the case since the pandemic. At the smallest increment of production, an individual with a commercial driver’s license could acquire a tractor and trailer, obtain insurance, register with the government and be in business. If the business did not work out, the individual could hand the keys to the equipment lender and be on with their life. COVID changed these dynamics. Equipment was wildly expensive and lenders required more security than just the underlying asset. New entrants needed to pledge their homes or life savings. When the market turned, there was no exit possible because they were “upside down.” The asset was worth less than they paid for it. These owner-operators are now forced into an untenable situation. Having no exit, their only choice is to keep driving until the market changes. Because survival — not profitability — is the goal, their floor price is what I call “direct cash costs.” In the ATRI model, this is fuel, insurance, permits/licenses and tolls. Costs such as equipment payments, maintenance and repair and tires are deferred until the end. I call them “episodic cash.” Driver wages and benefits are notional. The second chart shows how these costs have tracked the past 10 years. I have also included traditional truckload and intermodal. The former has no episodic cash. Maintenance is maintained, and equipment cost is deferred by parking equipment. Non-asset intermodal is all “direct cash” because all components are purchased. Bimodal intermodal providers are not shown, but they would be between traditional truckload and non-asset intermodal. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="7c8a9981-9386-4062-844d-cd07eb8ea529"></dynamic-object></div>The second chart also explains the freight recession. The traditional economies of scale enjoyed by large truckload carriers over owner-operators are meaningless when costs are not “apples to apples.” The same applies to intermodal’s competitive advantage. The intermodal line may be a little high; however, we have not seen a widespread willingness of railroads to cut their rates. This situation is not The Flying Dutchman, a phantom ship doomed to sail forever. Eventually, the equipment will be retired, and “normal” market conditions will return. Until then, this market situation is likely to maintain. Contact Ted Prince at <a href="mailto:ted@tricitiesintermodal.com">ted@tricitiesintermodal.com</a>.</div>

The surface freight transportation industry is now pinning its hope on economic recovery — for the third straight year — on an expected recovery in the second half of the year. The industry consensus calls for incremental improvement in truckload rates driven by gradual improvement in sector fundamentals throughout the year. Nevertheless, the most recent results of many public truckload stocks have been sobering. Although some carriers observed some “green shoots” during peak season, post-election gains have been given back — and then some. Multiples are below historic norms, and fleet sizes continue to contract — despite several years of shrinkage. There is widespread recognition that the industry has been caught in the jaws of a historically unprecedented freight recession caused by rate deflation accompanied by cost inflation. If carriers are to return to historical levels of profitability, there is a need for rate and volume increases to deliver top-line growth. To analyze this dichotomy, I utilized “An Analysis of the Operational Cost of Trucking: 2024 Update.” Prepared by the American Transportation Research Institute (ATRI), this annual report casts a wide net in respondent type, size and operating model; provides historical context for almost the past 20 years and is remarkably transparent when compared with other self-anointed experts. The first chart explains this difference by looking at two distinct metrics: driver cost per hour and fuel cost per mile. Fuel costs have deviated wildly over this period, whereas driver cost has been steadily increasing. Nevertheless, in an environment where trucking costs are on an inexorable inflationary arc, how have rates remained so depressed? I believe that the issue is that the trucking market is less “free” since the COVID-19 pandemic. A free market exists when supply and demand (through “voluntary exchange”) determine economic outcomes. Buyers and sellers are free to trade goods and services free of governmental intervention or market dominance by one side: monopoly, oligopoly or monopsony. A free market also requires the freedom of firms to enter that market because there are no barriers of entry. Since deregulation, the truckload market has had this freedom. However, market freedom also permits firms to freely depart from the market without any barriers to exit. This has not necessarily been the case since the pandemic. At the smallest increment of production, an individual with a commercial driver’s license could acquire a tractor and trailer, obtain insurance, register with the government and be in business. If the business did not work out, the individual could hand the keys to the equipment lender and be on with their life. COVID changed these dynamics. Equipment was wildly expensive and lenders required more security than just the underlying asset. New entrants needed to pledge their homes or life savings. When the market turned, there was no exit possible because they were “upside down.” The asset was worth less than they paid for it. These owner-operators are now forced into an untenable situation. Having no exit, their only choice is to keep driving until the market changes. Because survival — not profitability — is the goal, their floor price is what I call “direct cash costs.” In the ATRI model, this is fuel, insurance, permits/licenses and tolls. Costs such as equipment payments, maintenance and repair and tires are deferred until the end. I call them “episodic cash.” Driver wages and benefits are notional. The second chart shows how these costs have tracked the past 10 years. I have also included traditional truckload and intermodal. The former has no episodic cash. Maintenance is maintained, and equipment cost is deferred by parking equipment. Non-asset intermodal is all “direct cash” because all components are purchased. Bimodal intermodal providers are not shown, but they would be between traditional truckload and non-asset intermodal. The second chart also explains the freight recession. The traditional economies of scale enjoyed by large truckload carriers over owner-operators are meaningless when costs are not “apples to apples.” The same applies to intermodal’s competitive advantage. The intermodal line may be a little high; however, we have not seen a widespread willingness of railroads to cut their rates. This situation is not The Flying Dutchman, a phantom ship doomed to sail forever. Eventually, the equipment will be retired, and “normal” market conditions will return. Until then, this market situation is likely to maintain. Contact Ted Prince at ted@tricitiesintermodal.com .

Surface industry faces obstacles on way to hoped-for H2 recovery

<div class="phx-topic abstract-wrapper">No matter what changes occur, a FedEx Freight spinoff as a standalone LTL carrier will be good for the entire industry, writes Satish Jindel.</div>

No matter what changes occur, a FedEx Freight spinoff as a standalone LTL carrier will be good for the entire industry, writes Satish Jindel.

<div class="phx-topic">On June 25, 2024, during an earnings call, FedEx leaders announced that the company’s board had authorized management to explore options for a sale or spinoff of FedEx Freight, and that a decision would be announced by the end of the year. On Dec. 19, <a href="https://www.joc.com/article/fedex-freight-spinoff-is-latest-move-to-reshape-us-ltl-market-5909683">the leadership announced that a spinoff</a> was the best option and would be completed over 18 months. Why tell the shareholders and the less-than-truckload (LTL) market of this move if it is not happening for many months? Now, competitors and shippers can prepare for the various changes that could result from the FedEx Freight spinoff. Competing carriers and shippers should benefit from FedEx’s Priority and Economy services getting merged for a number of reasons. While the parcel market supports express and ground services, the FedEx Express volume has been shrinking for many years, with FedEx Ground now representing over 80% of total parcel volume. So, if there is a rationale to merge the Express and Ground parcel networks, FedEx Freight’s Priority and Economy services should also be merged. The premium for the Priority service price is so small that it does not make up for the various costs related to offering two services. If the two services were so appealing and financially rewarding, other LTL carriers would have done the same. Yet after 12 years, no other LTL carrier has followed suit. Many LTL carriers with just one service are generating operating margins better than 14.5% of FedEx Freight. As the LTL industry speeds up the transit times on high-volume lanes, the gap between Priority and Economy services will shrink. <h3>Greater role for technology </h3>While the parent company wants to spin it off as FedEx Freight, expect the new board to rename it American Freightways. With relief from intercompany charges of $528 million during fiscal year 2024 paid to FedEx Corporation for marketing, sales, technology and billing support, the spinoff will save FedEx Freight a few hundred million dollars by handling those corporate support functions itself. If it uses that money to go for greater market share with pricing initiatives, it could be good news for shippers. Shippers should get ready for a greater role of technology. With the National Motor Freight Traffic Association finally adopting dimensional pricing, there will be a greater need by shippers and carriers to capture shipment dimensions. This change should ensure more accurate billing and reduce the cost for auditing all freight bills for proper classification. With shippers being required to pay greater attention to the dimensions of the pallets, they can expect FedEx Freight support to improve their palletizing just as FedEx helps parcel customers improve their packaging. Because there are practically no appointment deliveries in the parcel business, expect FedEx Freight to embrace opportunities with AI to reduce the number of appointment deliveries, which should help shippers avoid charges for such service. We can also expect FedEx Freight to take greater interest in participating in LTL industry conferences and contributing its shipment data to SMC3’s national LTL database. No matter which of these changes occur, a FedEx Freight spinoff as a standalone LTL carrier will be good for the entire industry. And for those wondering why FedEx needs 18 months to spin off Freight, just imagine the pressure on the board and leadership that may find that investors are valuing its LTL business at a higher market cap than its parcel business, which is generating just a 5.5% margin compared with 14.5% for LTL business. Contact Satish Jindel at <a href="mailto:info@shipmatrix.com">info@shipmatrix.com</a>. </div>

On June 25, 2024, during an earnings call, FedEx leaders announced that the company’s board had authorized management to explore options for a sale or spinoff of FedEx Freight, and that a decision would be announced by the end of the year. On Dec. 19, the leadership announced that a spinoff was the best option and would be completed over 18 months. Why tell the shareholders and the less-than-truckload (LTL) market of this move if it is not happening for many months? Now, competitors and shippers can prepare for the various changes that could result from the FedEx Freight spinoff. Competing carriers and shippers should benefit from FedEx’s Priority and Economy services getting merged for a number of reasons. While the parcel market supports express and ground services, the FedEx Express volume has been shrinking for many years, with FedEx Ground now representing over 80% of total parcel volume. So, if there is a rationale to merge the Express and Ground parcel networks, FedEx Freight’s Priority and Economy services should also be merged. The premium for the Priority service price is so small that it does not make up for the various costs related to offering two services. If the two services were so appealing and financially rewarding, other LTL carriers would have done the same. Yet after 12 years, no other LTL carrier has followed suit. Many LTL carriers with just one service are generating operating margins better than 14.5% of FedEx Freight. As the LTL industry speeds up the transit times on high-volume lanes, the gap between Priority and Economy services will shrink. Greater role for technology While the parent company wants to spin it off as FedEx Freight, expect the new board to rename it American Freightways. With relief from intercompany charges of $528 million during fiscal year 2024 paid to FedEx Corporation for marketing, sales, technology and billing support, the spinoff will save FedEx Freight a few hundred million dollars by handling those corporate support functions itself. If it uses that money to go for greater market share with pricing initiatives, it could be good news for shippers. Shippers should get ready for a greater role of technology. With the National Motor Freight Traffic Association finally adopting dimensional pricing, there will be a greater need by shippers and carriers to capture shipment dimensions. This change should ensure more accurate billing and reduce the cost for auditing all freight bills for proper classification. With shippers being required to pay greater attention to the dimensions of the pallets, they can expect FedEx Freight support to improve their palletizing just as FedEx helps parcel customers improve their packaging. Because there are practically no appointment deliveries in the parcel business, expect FedEx Freight to embrace opportunities with AI to reduce the number of appointment deliveries, which should help shippers avoid charges for such service. We can also expect FedEx Freight to take greater interest in participating in LTL industry conferences and contributing its shipment data to SMC3’s national LTL database. No matter which of these changes occur, a FedEx Freight spinoff as a standalone LTL carrier will be good for the entire industry. And for those wondering why FedEx needs 18 months to spin off Freight, just imagine the pressure on the board and leadership that may find that investors are valuing its LTL business at a higher market cap than its parcel business, which is generating just a 5.5% margin compared with 14.5% for LTL business. Contact Satish Jindel at info@shipmatrix.com .

How the LTL market could evolve as the FedEx Freight spinoff plays out

Dry Van

{name} 
{dateX.formatDate('MMM dd, yyyy')}: ${valueY}
 Weekly % change: {van_rate_previous_week_change.formatNumber('#.##%')}

Flatbed

{name} 
{dateX.formatDate('MMM dd, yyyy')}: ${valueY}
 Weekly % change: {flatbed_rate_previous_week_change.formatNumber('#.##%')}

Refrigerated

{name} 
{dateX.formatDate('MMM dd, yyyy')}: ${valueY} 
 Weekly % change: {reefer_rate_previous_week_change.formatNumber('#.##%')}

DAT Freight & Analytics is an independent source of truckload pricing and business intelligence. Using an automated daily process, DAT collects invoices from nearly 1,200 transportation companies totaling more than $137 billion in freight spend annually. It verifies and updates data daily; each market rate reported in RateView Analytics requires a minimum number of submissions, so prices cannot be manipulated; and the algorithms account for outliers. [DAT](https://dat.com)

US dry-van, flatbed and refrigerated truckload spot rates (DAT)

US Truckload spot rates weekly (DAT) Gateway

<div class="phx-topic abstract-wrapper">With the door to US trade effectively slammed shut by tariffs, Chinese manufacturers are urgently looking for alternative markets in which to offload their surplus inventory.</div>

With the door to US trade effectively slammed shut by tariffs, Chinese manufacturers are urgently looking for alternative markets in which to offload their surplus inventory.

<div class="phx-topic">The European Commission is closely monitoring containerized imports from China amid growing fears that the high US tariffs will force a redirection of trans-Pacific trade flows and flood Europe with Chinese goods. While there is no evidence yet of increasing volume from China above seasonal norms, the commission is taking no chances and has deployed an “Import Surveillance Task Force” to track any irregular changes in trade. “The commission is monitoring imports closely to ensure that it detects in good time any potential increase in imports due to trade diversion,” Olof Gill, spokesperson for trade at the European Commission, told the Journal of Commerce Wednesday. The US’ 145% tariffs on Chinese imports came into effect April 9, leading to significant frontloading ahead of that date and a <a href="https://www.joc.com/article/trans-pacific-blank-sailings-set-to-rise-after-china-bookings-drop-sharply-5984166">large-scale cancellation of cargo bookings</a> thereafter. Some shippers are requesting containers already in-gated at Chinese origins not be loaded on ships, while others have asked that containers be pulled completely from port, according to a trans-Pacific carrier executive. Ships leaving China for the US in the coming weeks are expected to be half-full as the cancellations continue, with significant blank sailings likely on the trans-Pacific and carriers seeking out other markets to utilize their capacity. Southeast Asian origins, for instance, are seeing a surge in ship utilization as shippers frontload exports from those nations to the US to take advantage of a 90-day reprieve on reciprocal tariffs. With the door to US trade effectively slammed shut, Chinese manufacturers are urgently looking for alternative markets in which to offload their surplus inventory. Europe’s huge consumer base is an attractive target, and the European Commission is shoring up its defenses against any incoming wave of cheap Chinese products that could displace European-made goods. Gill said if the new monitoring mechanism detected an increase in Chinese imports that could harm European Union industry, the EU “will be ready to respond appropriately.” “In such a case, the commission could deploy ... its trade defense instruments, including a safeguard investigation that could be initiated in case an import surge causes, or threatens to cause, serious injury to EU industry,” the spokesman added. Such is the concern in Europe that European Commission President Ursula von der Leyen called Chinese Premier Li Qiang last week to urge Beijing to address possible trade diversions due to US tariffs. <h3>Record capacity deployed on Asia-Europe trade </h3>The concerns of the European Commission might be valid. According to Sea-Intelligence Maritime Analysis, carriers have announced an all-time high in capacity sailing out of Asia toward North Europe this week at 411,600 TEUs, beating the record set in early March of 2021, with very limited capacity blanked. “Surely not a coincidence, and even though some of it should have sailed last week, it’s not canceled but set to sail this week,” said Peter Sand, chief analyst for rate benchmarking platform Xeneta. The average transit time from China to North Europe is 54 days, meaning the first shipments from any diverted trade will begin to arrive in early June. Casper Ellerbaek, global head of ocean freight at DHL Global Forwarding, said strong bookings from Asia to Europe have been sustained through recent weeks, but that was aligned with DHL’s usual book of business. “There is indeed speculation within the market that, as US demand decreases due to the Trump tariffs, China may seek alternative markets to offload its goods at competitive prices,” Ellerbaek told the Journal of Commerce, adding, however, that it was too early to definitively identify that trend. “Currently, many Chinese factories have likely manufactured products based on existing orders from US importers,” he said. “These finished goods or in-progress orders may not be easily cancellable, and some are already awaiting shipment to the US. As such, we have not yet seen a significant increase in Chinese containers destined for European ports.” Also not yet seeing a significant rise in China volume was Marc Meier, global head of ocean freight at Toll Group. But he warned that could change. “One thing we can say is that all signs point towards China and others having to play more in other markets, so Asia to Europe will surely receive more focus,” Meier told the Journal of Commerce Wednesday. Carriers shifting capacity around to mitigate the impact of US tariffs is bringing a familiar disruptive factor back into the mix — equipment imbalances. “If we do begin to see trade flow impacts from the tariffs, it is likely that shipping lines will adjust their sailing schedules, potentially omitting some or all Chinese ports on certain voyages to accommodate increased demand from other regions,” Ellerbaek said. “This adjustment will lead to an equipment imbalance, as seen in previous disruptions like the Red Sea crisis and during the pandemic, where repositioning equipment to align with new trade flows takes time,” he added. <h3>China surge would worsen persistent port congestion </h3>Another potential issue is that any surge in Chinese imports will quickly exacerbate the severe port congestion that is still causing delays across the major North Europe and Mediterranean gateways. A host of factors are responsible for the bottlenecks, including full container yards at most terminals, crane maintenance in some ports, berth congestion, rail disruption from line closures in northern Germany and low water levels on the Rhine River impacting inland connections. HMM is reporting berth waiting times of 18 days in London Gateway and 4.5 days at the Greek hub of Piraeus, where 12 feeder vessels are currently waiting to be handled. <div class="wrapper-narrow"><dynamic-object type="jocchartid" resource-id="0e7c6c96-deff-4701-bb62-76f7f3ffef74"></dynamic-object></div>While Europe prepares for a possible wave of Chinese imports, the spot market has finally arrested its steady slide that began in late December. Xeneta data shows that China to North Europe rates are up 7% since April 1 at $2,514 per FEU. But while an increase in Chinese imports may help rising rates, it won’t last, according to Rico Luman, senior economist at global Bank ING. “It will be the first reaction because of this disruption but afterwards the massive overcapacity in container shipping will weigh on rates once again, because that is the backdrop to all of this,” Luman told the Journal of Commerce. “This tariff discussion is not good news for global trade, and I expect rates to drop again over the course of this year,” he added. Contact Greg Knowler at <a href="mailto:greg.knowler@spglobal.com">greg.knowler@spglobal.com</a>. </div>

The European Commission is closely monitoring containerized imports from China amid growing fears that the high US tariffs will force a redirection of trans-Pacific trade flows and flood Europe with Chinese goods. While there is no evidence yet of increasing volume from China above seasonal norms, the commission is taking no chances and has deployed an “Import Surveillance Task Force” to track any irregular changes in trade. “The commission is monitoring imports closely to ensure that it detects in good time any potential increase in imports due to trade diversion,” Olof Gill, spokesperson for trade at the European Commission, told the Journal of Commerce Wednesday. The US’ 145% tariffs on Chinese imports came into effect April 9, leading to significant frontloading ahead of that date and a large-scale cancellation of cargo bookings thereafter. Some shippers are requesting containers already in-gated at Chinese origins not be loaded on ships, while others have asked that containers be pulled completely from port, according to a trans-Pacific carrier executive. Ships leaving China for the US in the coming weeks are expected to be half-full as the cancellations continue, with significant blank sailings likely on the trans-Pacific and carriers seeking out other markets to utilize their capacity. Southeast Asian origins, for instance, are seeing a surge in ship utilization as shippers frontload exports from those nations to the US to take advantage of a 90-day reprieve on reciprocal tariffs. With the door to US trade effectively slammed shut, Chinese manufacturers are urgently looking for alternative markets in which to offload their surplus inventory. Europe’s huge consumer base is an attractive target, and the European Commission is shoring up its defenses against any incoming wave of cheap Chinese products that could displace European-made goods. Gill said if the new monitoring mechanism detected an increase in Chinese imports that could harm European Union industry, the EU “will be ready to respond appropriately.” “In such a case, the commission could deploy ... its trade defense instruments, including a safeguard investigation that could be initiated in case an import surge causes, or threatens to cause, serious injury to EU industry,” the spokesman added. Such is the concern in Europe that European Commission President Ursula von der Leyen called Chinese Premier Li Qiang last week to urge Beijing to address possible trade diversions due to US tariffs. Record capacity deployed on Asia-Europe trade The concerns of the European Commission might be valid. According to Sea-Intelligence Maritime Analysis, carriers have announced an all-time high in capacity sailing out of Asia toward North Europe this week at 411,600 TEUs, beating the record set in early March of 2021, with very limited capacity blanked. “Surely not a coincidence, and even though some of it should have sailed last week, it’s not canceled but set to sail this week,” said Peter Sand, chief analyst for rate benchmarking platform Xeneta. The average transit time from China to North Europe is 54 days, meaning the first shipments from any diverted trade will begin to arrive in early June. Casper Ellerbaek, global head of ocean freight at DHL Global Forwarding, said strong bookings from Asia to Europe have been sustained through recent weeks, but that was aligned with DHL’s usual book of business. “There is indeed speculation within the market that, as US demand decreases due to the Trump tariffs, China may seek alternative markets to offload its goods at competitive prices,” Ellerbaek told the Journal of Commerce, adding, however, that it was too early to definitively identify that trend. “Currently, many Chinese factories have likely manufactured products based on existing orders from US importers,” he said. “These finished goods or in-progress orders may not be easily cancellable, and some are already awaiting shipment to the US. As such, we have not yet seen a significant increase in Chinese containers destined for European ports.” Also not yet seeing a significant rise in China volume was Marc Meier, global head of ocean freight at Toll Group. But he warned that could change. “One thing we can say is that all signs point towards China and others having to play more in other markets, so Asia to Europe will surely receive more focus,” Meier told the Journal of Commerce Wednesday. Carriers shifting capacity around to mitigate the impact of US tariffs is bringing a familiar disruptive factor back into the mix — equipment imbalances. “If we do begin to see trade flow impacts from the tariffs, it is likely that shipping lines will adjust their sailing schedules, potentially omitting some or all Chinese ports on certain voyages to accommodate increased demand from other regions,” Ellerbaek said. “This adjustment will lead to an equipment imbalance, as seen in previous disruptions like the Red Sea crisis and during the pandemic, where repositioning equipment to align with new trade flows takes time,” he added. China surge would worsen persistent port congestion Another potential issue is that any surge in Chinese imports will quickly exacerbate the severe port congestion that is still causing delays across the major North Europe and Mediterranean gateways. A host of factors are responsible for the bottlenecks, including full container yards at most terminals, crane maintenance in some ports, berth congestion, rail disruption from line closures in northern Germany and low water levels on the Rhine River impacting inland connections. HMM is reporting berth waiting times of 18 days in London Gateway and 4.5 days at the Greek hub of Piraeus, where 12 feeder vessels are currently waiting to be handled. While Europe prepares for a possible wave of Chinese imports, the spot market has finally arrested its steady slide that began in late December. Xeneta data shows that China to North Europe rates are up 7% since April 1 at $2,514 per FEU. But while an increase in Chinese imports may help rising rates, it won’t last, according to Rico Luman, senior economist at global Bank ING. “It will be the first reaction because of this disruption but afterwards the massive overcapacity in container shipping will weigh on rates once again, because that is the backdrop to all of this,” Luman told the Journal of Commerce. “This tariff discussion is not good news for global trade, and I expect rates to drop again over the course of this year,” he added. Contact Greg Knowler at greg.knowler@spglobal.com .

Forwarding

Europe on alert to track any wave of diverted Chinese imports

<div class="phx-topic abstract-wrapper">US tariffs are forcing shippers in Mexico to rethink global sourcing and logistics strategies as complying with the USMCA becomes more complex. </div>

US tariffs are forcing shippers in Mexico to rethink global sourcing and logistics strategies as complying with the USMCA becomes more complex.

<div class="phx-topic">For logistics manager Yuri Garcia, the confusion surrounding US trade disputes with Mexico, China and the rest of the globe increasingly resembles the chaotic early days of the COVID-19 pandemic. “Every day back then, we were turning on our TVs in the morning to see where we were going, what are they saying now, right?” Garcia said during a panel discussion at the Redwood Mexico Cross-Border Logistics Council in Monterrey last week. Today, she’s tuning into the news each morning to find out which nations and what goods are being hit with US tariffs, how high duties are going to go, and what may come next. “Are the tariffs on China going to be 125% or 145%?” Garcia said. The total tariffs imposed on China reached 145% as of April 10, the date she spoke at the conference. “You know tomorrow it’s going to be something else, so you’ve got to be prepared.” Being prepared for the unknown in terms of tariffs and trade was the crux of many discussions at the logistics conference in Monterrey, where Garcia works for Japan-based Nidec Motor Corp. Nidec produces industrial motors and generators, moving about 800 shipments a month across the US-Mexico border in both directions. Nidec also imports goods to Mexico from Europe and Asia, including China. So, knowing precisely what products and nations are being affected or targeted by tariffs is critical to planning and preparation for shippers with suppliers and customers in several international markets, not just the US and Mexico. Goods produced in Mexico typically contain components from several countries. Measuring the exact percentage of inputs from each international source is key to knowing whether a shipment will enter the US duty-free or be hit with a 25% import tax. “Right now, we have a lot of suppliers in Asia, so we have to have some other sources,” said Garcia. Nidec isn’t looking to drop any suppliers, she said, but the company needs to add some alternative vendors in the US and in Mexico to its portfolio. <h3>Diversifying sourcing </h3>The same issue is hitting manufacturers in Mexico across industrial sectors, speakers and sources at the Redwood Mexico event told the Journal of Commerce. “We’ve done a little more exploring to give ourselves more options,” said Bill Fogt, senior vice president at Dometic, a maker of outdoor products, including Igloo coolers. Based in Sweden, Dometic has 23 manufacturing facilities in 11 countries, with two factories in Mexico. Expecting change in the “supply chain climate” to accelerate, Dometic is leaning into its existing supplier relationships. “We want to be very close to our suppliers, whether in logistics or raw materials,” Fogt said. Maintaining close communications with suppliers, partners and customers is key to making sure US imports are <a href="https://www.joc.com/article/tariff-uncertainty-pushing-up-transportation-costs-at-us-mexico-border-5984698">compliant with the rules of origin</a> in the US-Mexico-Canada Agreement (USMCA) to avoid the Trump administration’s 25% tariff. “You need to keep your paper trail carefully, and make sure you’re adjusting for any changes” in components and global supply, said trade attorney Luis Martinez, a partner at Abogados Martinez Serna S.C. and a board member of the US Mexico Bar Association. Martinez urged shippers to audit the procedures they use to verify USMCA compliance. “A lot of companies do it yearly, but I know companies that do reviews every month,” he said. Daikin, a maker of air conditioners and refrigeration equipment, is in the midst of planning for potentially abrupt transportation and sourcing changes caused by tariffs, said Joe McAbee, the company’s vice president of domestic and international transportation. “We have manufacturing around the world, and so we can, to some degree, shift our production, although not quickly,” McAbee said in Monterrey. But he advises caution. “Every day is a new dynamic,” he said. “Every time a new tariff drops, your strategy changes. I think it’s important to let this play out and see where it’s going to go, because at some point it has to level out. We can't live in this continual chaos forever.” Contact William B. Cassidy at <a href="mailto:bill.cassidy@spglobal.com">bill.cassidy@spglobal.com</a>.</div>

For logistics manager Yuri Garcia, the confusion surrounding US trade disputes with Mexico, China and the rest of the globe increasingly resembles the chaotic early days of the COVID-19 pandemic. “Every day back then, we were turning on our TVs in the morning to see where we were going, what are they saying now, right?” Garcia said during a panel discussion at the Redwood Mexico Cross-Border Logistics Council in Monterrey last week. Today, she’s tuning into the news each morning to find out which nations and what goods are being hit with US tariffs, how high duties are going to go, and what may come next. “Are the tariffs on China going to be 125% or 145%?” Garcia said. The total tariffs imposed on China reached 145% as of April 10, the date she spoke at the conference. “You know tomorrow it’s going to be something else, so you’ve got to be prepared.” Being prepared for the unknown in terms of tariffs and trade was the crux of many discussions at the logistics conference in Monterrey, where Garcia works for Japan-based Nidec Motor Corp. Nidec produces industrial motors and generators, moving about 800 shipments a month across the US-Mexico border in both directions. Nidec also imports goods to Mexico from Europe and Asia, including China. So, knowing precisely what products and nations are being affected or targeted by tariffs is critical to planning and preparation for shippers with suppliers and customers in several international markets, not just the US and Mexico. Goods produced in Mexico typically contain components from several countries. Measuring the exact percentage of inputs from each international source is key to knowing whether a shipment will enter the US duty-free or be hit with a 25% import tax. “Right now, we have a lot of suppliers in Asia, so we have to have some other sources,” said Garcia. Nidec isn’t looking to drop any suppliers, she said, but the company needs to add some alternative vendors in the US and in Mexico to its portfolio. Diversifying sourcing The same issue is hitting manufacturers in Mexico across industrial sectors, speakers and sources at the Redwood Mexico event told the Journal of Commerce. “We’ve done a little more exploring to give ourselves more options,” said Bill Fogt, senior vice president at Dometic, a maker of outdoor products, including Igloo coolers. Based in Sweden, Dometic has 23 manufacturing facilities in 11 countries, with two factories in Mexico. Expecting change in the “supply chain climate” to accelerate, Dometic is leaning into its existing supplier relationships. “We want to be very close to our suppliers, whether in logistics or raw materials,” Fogt said. Maintaining close communications with suppliers, partners and customers is key to making sure US imports are compliant with the rules of origin in the US-Mexico-Canada Agreement (USMCA) to avoid the Trump administration’s 25% tariff. “You need to keep your paper trail carefully, and make sure you’re adjusting for any changes” in components and global supply, said trade attorney Luis Martinez, a partner at Abogados Martinez Serna S.C. and a board member of the US Mexico Bar Association. Martinez urged shippers to audit the procedures they use to verify USMCA compliance. “A lot of companies do it yearly, but I know companies that do reviews every month,” he said. Daikin, a maker of air conditioners and refrigeration equipment, is in the midst of planning for potentially abrupt transportation and sourcing changes caused by tariffs, said Joe McAbee, the company’s vice president of domestic and international transportation. “We have manufacturing around the world, and so we can, to some degree, shift our production, although not quickly,” McAbee said in Monterrey. But he advises caution. “Every day is a new dynamic,” he said. “Every time a new tariff drops, your strategy changes. I think it’s important to let this play out and see where it’s going to go, because at some point it has to level out. We can't live in this continual chaos forever.” Contact William B. Cassidy at bill.cassidy@spglobal.com .

Trucking News

Rail News

In Mexico, global shippers seek new logistics options amid shifting US tariffs

<div class="phx-topic abstract-wrapper">Some ships are leaving China just half-full as the Trump administration’s rush of tariffs sends shippers into contortions about what to do with their freight. </div>

Some ships are leaving China just half-full as the Trump administration’s rush of tariffs sends shippers into contortions about what to do with their freight.

<div class="phx-topic">Ocean carriers on the eastbound trans-Pacific are poised to blank more voyages after a slew of booking cancellations last week that could leave some ships departing China half-empty through May. As the uncertainty around US tariffs on Chinese goods drags out, shippers face on-the-fly decisions about what to do with their suddenly more expensive freight. Port of Los Angeles Executive Director Gene Seroka said Friday that 12 sailings from China to the US West Coast in May have been canceled due to the Trump administration’s decision to put tariffs of 145% on most goods from China. Those dozen cancellations would put May’s blanks above April’s, according to data from third-party logistics provider Spedag Americas, which recorded 11 blanked voyages to Los Angeles during April, including three weekly voyages from a small independent carrier with about 2,000 TEUs of capacity. Ocean Alliance member Evergreen Marine, which operates the CPS service to Los Angeles, will have the service’s last scheduled voyage from Shanghai depart on Tuesday. No further sailings from China are scheduled until May 21, according to China-based shipping agents and the latest CPS schedule, which would mark four straight weeks of blanked service. The canceled voyages would remove 32,000 TEUs of capacity from the trans-Pacific over that period. Evergreen declined a request for comment about the CPS service. James Caradonna, executive vice president of Spedag Americas, told the Journal of Commerce that April’s blank sailings were for just one or two non-consecutive weeks. Carriers had been expected to start bringing more ships into service as 2025–26 annual service contracts are signed and seasonal summer shipments start. “Four consecutive weeks [of blank sailings on the service] is extreme,” Caradonna said. <h3>Half-full ships from China </h3>A senior vice president for an independent ocean carrier in the trans-Pacific trades told the Journal of Commerce that his company saw an immediate 30% drop in container bookings out of China last week due to the new tariffs. Other customers are requesting that containers already in-gated at origin not be loaded on ships, while others have asked that containers be pulled completely from the port, the source said, not an easy task inside of China’s high-volume gateways. Likewise, the source said there is concern that cargo already loaded on ships from China may be abandoned at US ports due to the tariff costs. He expects that ships leaving China for the US in the coming weeks will be less than half-full as the cancellations continue, forcing the carrier to blank more voyages. “People are canceling and putting cargo [from] China on pause,” the source said. “It will accelerate our blank sailing schedule because vessel utilization is dropping.” While utilization out of China is falling, he said ships in the Southeast Asia trade are seeing 90% to 100% utilization as US shippers seek to use the 90-day reprieve from reciprocal tariffs on other countries to frontload cargo, adding that vessels in China-US trades could be redeployed to Southeast Asia. Likewise, Asia-Mediterranean trades are seeing increasing strength, sending vessels in yet another direction. The longer the US and China engage in a back-and-forth on tariffs, the more it will force a long-term reconsideration of the carrier’s trans-Pacific network and whether there is enough volume out of China to support calls. “Our short-term reaction is to blank,” the source said. “But as people are accelerating their alternative sourcing — and this is giving everyone reason to accelerate those efforts — the effect is that we have to look at our rotations. We would probably eliminate some of the China ports.” Jason Cook, managing director of non-vessel-operating common carrier (NVO) Ardent Global Logistics, told the Journal of Commerce he’s seen a 60% drop in bookings out of China this week due to the tariffs. While the cancellations were initially among intermittent, low-volume shippers, he said the concerns about tariffs are now spreading to larger shippers with regular, consistent volume. “Whatever [was] leaving China on April 9, we [were] told to cancel it,” Cook said. “It’s not only the smaller customers, but the big ones as well saying we’re going to pause for two weeks.” April 9 was the date country-specific reciprocal tariffs took effect; they have since been paused for 90 days. But the China reciprocal tariffs remain in place. Ardent’s customers are also asking that their US-bound cargo at Chinese ports not be loaded or be removed from the marine terminal, Cook said. One customer tried to have the goods returned to the Chinese manufacturer, but it refused, he added. “The lack of clarity about tariffs has left so many customers confused that they are canceling all bookings, even if the container was already gated into the terminal,” Cook said. Cook is now fielding requests for use of bonded warehouses and foreign trade zones in the US as a short-term way to deal with the tariffs. He also expects that there will much more demand for freight out of Southeast Asia and India that will keep ships on those trades full. But with most of the empty containers still in China, US shippers may see delays at origin. “Once cargo out of China dries up, Southeast Asia is going to go a bit ballistic,” Cook said. “There’s not enough equipment and not enough calls. It’s setting up for some serious disruption.” <h3>Preparing for decline in volumes </h3>A New Jersey-based executive with a forwarder that handles 40,000 containers per year into the US told the Journal of Commerce there has been about a 20% drop in China-origin freight over the past week due to the tariffs. He said that most of the cancellations are among intermittent or low-volume shippers with about 2,000 containers per year. So far, the cancellations mostly just cover anything that would land in May, but as the tariff policy remains in place, he expects to see the cancellations start to affect cargo further out in June. The forwarder said some ocean carriers are deferring 2025 contract signings until May due to the uncertainty around tariffs. “I think this can get worse,” he said. A US-based executive for an alliance ocean carrier said that while some shippers immediately canceled bookings from China, other major customers are still proceeding with their shipments. But he said caution is increasing the longer Trump’s trade war with China drags out, adding that he expects tariffs will eventually cause more shippers to halt their freight from China. “Orders may be canceled or delayed until there’s more clarity on tariffs, so we’re preparing for a potential [volume] dip in the coming months,” the source said. And if the tariffs on China persist, the issue could reach far beyond volume retractions. According to Sanjay Tejwani, CEO of consulting firm 365 Logistics, the third quarter could bring tough decisions for some shippers moving Chinese cargo. “In Q3, if it remains as-is, some people are not going to ship,” said Tejwani. “Some things are just unaffordable. I am hearing that [some] containers might get abandoned. The importers may not even take delivery because they don’t want to pay the duties.” Benton Kauffman, head of trans-Pacific air and sea logistics at the forwarder DSV Global, told the Journal of Commerce Monday that overall eastbound freight in the trans-Pacific is down about 20%, but 60% of that volume is out of China. “I think in the next two weeks we will see Southeast Asia bounce back,” Kauffman said. A second carrier source said most retailers and direct importers are covered for at least the next three months because they have sufficient inventory to get them well into the summer. After that, they will have to decide how much they have to import and from which countries in the second half of the year, he said. “Eventually they will have to restock,” the carrier executive said. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. Senior Editor Bill Mongelluzzo and Associate Editor Laura Robb contributed to this report. </div>

Ocean carriers on the eastbound trans-Pacific are poised to blank more voyages after a slew of booking cancellations last week that could leave some ships departing China half-empty through May. As the uncertainty around US tariffs on Chinese goods drags out, shippers face on-the-fly decisions about what to do with their suddenly more expensive freight. Port of Los Angeles Executive Director Gene Seroka said Friday that 12 sailings from China to the US West Coast in May have been canceled due to the Trump administration’s decision to put tariffs of 145% on most goods from China. Those dozen cancellations would put May’s blanks above April’s, according to data from third-party logistics provider Spedag Americas, which recorded 11 blanked voyages to Los Angeles during April, including three weekly voyages from a small independent carrier with about 2,000 TEUs of capacity. Ocean Alliance member Evergreen Marine, which operates the CPS service to Los Angeles, will have the service’s last scheduled voyage from Shanghai depart on Tuesday. No further sailings from China are scheduled until May 21, according to China-based shipping agents and the latest CPS schedule, which would mark four straight weeks of blanked service. The canceled voyages would remove 32,000 TEUs of capacity from the trans-Pacific over that period. Evergreen declined a request for comment about the CPS service. James Caradonna, executive vice president of Spedag Americas, told the Journal of Commerce that April’s blank sailings were for just one or two non-consecutive weeks. Carriers had been expected to start bringing more ships into service as 2025–26 annual service contracts are signed and seasonal summer shipments start. “Four consecutive weeks [of blank sailings on the service] is extreme,” Caradonna said. Half-full ships from China A senior vice president for an independent ocean carrier in the trans-Pacific trades told the Journal of Commerce that his company saw an immediate 30% drop in container bookings out of China last week due to the new tariffs. Other customers are requesting that containers already in-gated at origin not be loaded on ships, while others have asked that containers be pulled completely from the port, the source said, not an easy task inside of China’s high-volume gateways. Likewise, the source said there is concern that cargo already loaded on ships from China may be abandoned at US ports due to the tariff costs. He expects that ships leaving China for the US in the coming weeks will be less than half-full as the cancellations continue, forcing the carrier to blank more voyages. “People are canceling and putting cargo [from] China on pause,” the source said. “It will accelerate our blank sailing schedule because vessel utilization is dropping.” While utilization out of China is falling, he said ships in the Southeast Asia trade are seeing 90% to 100% utilization as US shippers seek to use the 90-day reprieve from reciprocal tariffs on other countries to frontload cargo, adding that vessels in China-US trades could be redeployed to Southeast Asia. Likewise, Asia-Mediterranean trades are seeing increasing strength, sending vessels in yet another direction. The longer the US and China engage in a back-and-forth on tariffs, the more it will force a long-term reconsideration of the carrier’s trans-Pacific network and whether there is enough volume out of China to support calls. “Our short-term reaction is to blank,” the source said. “But as people are accelerating their alternative sourcing — and this is giving everyone reason to accelerate those efforts — the effect is that we have to look at our rotations. We would probably eliminate some of the China ports.” Jason Cook, managing director of non-vessel-operating common carrier (NVO) Ardent Global Logistics, told the Journal of Commerce he’s seen a 60% drop in bookings out of China this week due to the tariffs. While the cancellations were initially among intermittent, low-volume shippers, he said the concerns about tariffs are now spreading to larger shippers with regular, consistent volume. “Whatever [was] leaving China on April 9, we [were] told to cancel it,” Cook said. “It’s not only the smaller customers, but the big ones as well saying we’re going to pause for two weeks.” April 9 was the date country-specific reciprocal tariffs took effect; they have since been paused for 90 days. But the China reciprocal tariffs remain in place. Ardent’s customers are also asking that their US-bound cargo at Chinese ports not be loaded or be removed from the marine terminal, Cook said. One customer tried to have the goods returned to the Chinese manufacturer, but it refused, he added. “The lack of clarity about tariffs has left so many customers confused that they are canceling all bookings, even if the container was already gated into the terminal,” Cook said. Cook is now fielding requests for use of bonded warehouses and foreign trade zones in the US as a short-term way to deal with the tariffs. He also expects that there will much more demand for freight out of Southeast Asia and India that will keep ships on those trades full. But with most of the empty containers still in China, US shippers may see delays at origin. “Once cargo out of China dries up, Southeast Asia is going to go a bit ballistic,” Cook said. “There’s not enough equipment and not enough calls. It’s setting up for some serious disruption.” Preparing for decline in volumes A New Jersey-based executive with a forwarder that handles 40,000 containers per year into the US told the Journal of Commerce there has been about a 20% drop in China-origin freight over the past week due to the tariffs. He said that most of the cancellations are among intermittent or low-volume shippers with about 2,000 containers per year. So far, the cancellations mostly just cover anything that would land in May, but as the tariff policy remains in place, he expects to see the cancellations start to affect cargo further out in June. The forwarder said some ocean carriers are deferring 2025 contract signings until May due to the uncertainty around tariffs. “I think this can get worse,” he said. A US-based executive for an alliance ocean carrier said that while some shippers immediately canceled bookings from China, other major customers are still proceeding with their shipments. But he said caution is increasing the longer Trump’s trade war with China drags out, adding that he expects tariffs will eventually cause more shippers to halt their freight from China. “Orders may be canceled or delayed until there’s more clarity on tariffs, so we’re preparing for a potential [volume] dip in the coming months,” the source said. And if the tariffs on China persist, the issue could reach far beyond volume retractions. According to Sanjay Tejwani, CEO of consulting firm 365 Logistics, the third quarter could bring tough decisions for some shippers moving Chinese cargo. “In Q3, if it remains as-is, some people are not going to ship,” said Tejwani. “Some things are just unaffordable. I am hearing that [some] containers might get abandoned. The importers may not even take delivery because they don’t want to pay the duties.” Benton Kauffman, head of trans-Pacific air and sea logistics at the forwarder DSV Global, told the Journal of Commerce Monday that overall eastbound freight in the trans-Pacific is down about 20%, but 60% of that volume is out of China. “I think in the next two weeks we will see Southeast Asia bounce back,” Kauffman said. A second carrier source said most retailers and direct importers are covered for at least the next three months because they have sufficient inventory to get them well into the summer. After that, they will have to decide how much they have to import and from which countries in the second half of the year, he said. “Eventually they will have to restock,” the carrier executive said. Contact Michael Angell at michael.angell@spglobal.com . Senior Editor Bill Mongelluzzo and Associate Editor Laura Robb contributed to this report.

Trans-Pacific blank sailings set to rise after China bookings drop sharply

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The world of LTL is slow to embrace change. Business anachronisms permeate current supply chain processes. These vestiges of the way things used to work define the LTL freight transportation procurement process of many modern shippers.David Knuth, logistics specialist at IEWC, a global supplier of cable and wire based in Wisconsin, is happy to have modernized the RFP process, automating the entire LTL bidding procedure with Bid$ense, SMC³’s automated truckload and LTL freight transportation sourcing solution. But when prompted, he can still recall what once was.In his previous job, a large part of his duties were consumed by creating an intermodal bid package for carriers. In a spreadsheet, Knuth detailed the company’s volumes lane by lane, taking care to delete any errant keystrokes or misleading data. He would then email out the information to each carrier, taking time to respond to detailed technical questions about the spreadsheet data. Finally, he had to compile all the results, create an algorithm that would compare the carriers on each lane, and award the business.“It was a huge undertaking. It took about four months to do,” Knuth said of the old process. “It was almost a full-time job for that part of the year, every year.”In his new job at IEWC, he sat down with Bid$ense on day one and was amazed at the capabilities. Knuth had never before used a bid tool. SMC³’s latest versions of Bid$ense automate the process even further, taking truckload and LTL RFPs entirely online. The tool draws on RFP best-practices protocols to streamline the bidding communication process, enabling bidding carriers to respond accurately and promptly to shipper requests. The solution also does all the distribution work automatically, electronically submitting shipper bid data to carriers based on their actual service capabilities and performance records. Carriers are alerted with timely prompts for RFP deliverables, so shippers aren’t waiting by the phone for responses.Another benefit of automating the process is the data-cleansing assistance. When Knuth sent spreadsheets to carriers, data errors might cloud the bidding process; he might have to resend data or simply accept a price that did not truly reflect the costs of doing business. Data cleansing is incredibly beneficial, he said.The spreadsheet technique also made bidding analysis an onerous task. Since Bid$ense automates and streamlines the entire RFP process, intensive examination is now simple. SMC³ knows that each bid has more than one best outcome. With uniform responses from each carrier, shippers can quickly rank results and create an unlimited quantity of what-if scenarios to make the optimal procurement decision.Jesse Burnett of Central Garden &amp; Pet experiences many of the same benefits. Founded in 1980, Central Garden &amp; Pet has spent the last three decades growing from a small garden supply company to a provider of a range of products from dog chews and bird seed to soil supplements and natural insecticides. For much of its life, the company shipped these disparate goods via LTL and truckload carriers to retailers throughout the country, relying on each business unit to negotiate directly with their freight transportation providers. This arrangement worked fairly well for a small company, but as Central Garden &amp; Pet expanded, leadership decided to consolidate decision making.Burnett helped centralize the transportation decision making in 2015 with SMC³’s Bid$ense. Before Bid$ense, every business unit operated independently as far as negotiating with carriers.“There were a lot of different things just floating around,” he said. “We didn’t have master agreements in place; no national pricing at all. The pricing from carriers was just all over the place, depending on where you were.”The transformations he saw with Bid$ense were immediate. Burnett has been using the tool about every other year since its implementation at the company. Central Garden and Pet’s $19.6 million 2019 LTL bid saved the company just more than 9 percent when compared to its historical average. For Burnett, though, bid automation extends far beyond savings.“We knew that we weren’t getting the best pricing offer from our carriers just because nothing was centralized,” he continued. “We knew that if we combined everything from all these business units and paired it with one corporate offering, then it would drive some cost benefit with it.”When the company initially decided to centralize bid procurement, executives researched a number of different methodologies and technologies. In the end, though, Burnett found that Bid$ense was both widespread and well known, and that his carrier partners already knew how to use the application. Burnett also highlighted the data-cleansing process as a major benefit, saying the rigorous process ensures that carriers always return the best price.“It definitely has helped drive savings,” he said. “Any time you go out there and you drive that competitiveness with the carriers and they know they’re in a bid environment, it seems to sharpen their pencils.”Transportation procurement is an integral part of the modern supply chain. With Bid$ense, shippers can develop a strategic implementation plan that saves them time and money, but also helps them create strong relationships with their carrier partners. These carriers appreciate the solution’s data-cleansing process; when carriers receive a complete shipment history and future volume forecast, they don’t have to guess on pricing. Carriers that receive more data from shippers get a complete picture of that shipper’s freight, allowing them to accurately plan instead of simply preparing for the worst-case scenario. Clean data presented through an automated system can lead to both bigger shipment savings and a lasting partnership between carrier and customer.Whether customers are looking to streamline over-the-road transportation bidding by automating the RFP process or create an entirely new, centralized sourcing process, Bid$ense has the analytical horsepower to get the job done.SMC³ 2020 Customer Case Study

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Shippers save money, time with automated transportation bidding tools

If there’s one immutable truth in the world of logistics, it’s this: LTL is an inherently complex form of transportation. Tariffs, rates, DIM weights, transit times — it’s enough to confuse even seasoned logistics professionals. The solution to this knowledge gap has historically been on-the-job training or university supply chain education, but for a variety of reasons there is now a pressing need for third-party, remote LTL training that prepares logistics workers for transportation success. Global Scope Can Overlook Local Intricacies In the past, professionals looking to move into a supply chain career learned about the basics of supply chain from universities. However, many of these college supply chain programs are now global in scope, focusing on worldwide supply chain management instead of the intricacies of specialized domestic transportation. And even these programs, which used to be widespread, are becoming less common. LTL is not an industry of broad-brush strokes; supply chain professionals really need a pointillistic understanding of the logistics of LTL in order to excel in the industry. Accelerating Need for Dedicated LTL Education This lack of specified training put the onus on employers to prepare new hires with the LTL knowledge needed to do their jobs. Dedicated LTL study is a necessity, not a luxury. At the same time, changes in LTL and the broader supply chain world are accelerating. The reliance on e-commerce has ballooned since the start of the pandemic, and last-mile LTL shipments and related e-commerce strains on the supply chain won’t diminish once social distancing abates. That genie isn’t going back into the bottle. So supply chain employers need logistics workers that are fully versed in all aspects of the industry, ready to solve unique shipping and delivery problems based on their extensive supply chain knowledge But why care about LTL? It’s been reported that some shippers in today’s world are no longer concerned with what mode is used to ship their goods. A Multimodal Approach Ensures On-Time Delivery This mode agnosticism means supply chain stakeholders have to be well versed in all modes of transportation. As unforeseen weather events and other disruptions, such as protests, become more common, savvy logistics employees will need to be armed with familiarity of all modes, not just the most popular, to ensure that freight is delivered on time, without damage, and in the most financially expedient way possible. Offerings like SMC³’s LTL online education courses cover a wide range of topics from LTL basics and operations to more advanced concepts like pricing analytics and transportation law. The company also has plans to continually refresh content, adding new expert presenters and taking the feedback of students to make the courses even better as time goes on. Learn more about&nbsp;<a href="https://logisticstrainingcenter.com/smc3-courses/" rel="noreferrer" class="joc_admin__link">SMC³’s LTL Online Education program</a>&nbsp;and view the 2021 hybrid schedule, featuring live industry experts,&nbsp;<a href="https://www.smc3.com/onlinelearning2021/" rel="noreferrer" class="joc_admin__link">here.</a>

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Filling the Supply Chain Education Gap with LTL Education Courses

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<div class="phx-topic abstract-wrapper">The export decline is already showing up in some data, with bookings for US exports to China for the week of April 8–15 down 5.4% from the prior week.</div>

The export decline is already showing up in some data, with bookings for US exports to China for the week of April 8–15 down 5.4% from the prior week.

<div class="phx-topic">Chinese buyers have begun to cancel orders of goods and commodities from US exporters amid the escalating trade conflict between the two nations, and stakeholders expect the cancellations to continue until the battle over tariffs is resolved.Exporters also expect they will need redirect their cargo to other Asian countries to make up for the diminished Chinese market. M. Can Fidan, vice president of business development at New York-based MTS Logistics, told the Journal of Commerce he’s already seen the cancellation of 250 polymers containers and another customer’s entire fertilizer order. “If these tariffs stay, there is no way China will keep buying these products from us,” said Fidan.The export decline is already showing up in data. Bookings for US exports to China for the week of April 8–15 were down 5.4% from the prior week at 17,220 TEUs, according to maritime visibility provider Vizion and data and analytics company Dun &amp; Bradstreet. Two exporters, five forwarders and the head of a shipping group who spoke to the Journal of Commerce said a further drop in China-bound volumes is inevitable if tariffs on China persist, mirroring <a href="https://www.joc.com/article/trans-pacific-blank-sailings-set-to-rise-after-china-bookings-drop-sharply-5984166">the market shift already observed with imports</a>.“If they had contracts to [export containers to China], my assumption would be that a lot of them would likely be canceled,” one exporter said.Another non-vessel-operating common carrier source said they are seeing cancellations on many China-bound exports, especially goods with lower margins where the buyers cannot afford the additional cost. At the same time, the source is seeing sellers of more valuable commodities attempt to pass down the cost to their customers.Meanwhile, several forwarders said demand is strong from other countries that have had their reciprocal US import tariffs paused for 90 days. Shippers and forwarders are forecasting a pickup in export cargo volumes bound for other Southeast Asia countries.“In [the] short term, I think we’re going to see a lot of agriculture sourcing shift [from China] to other countries,” said Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC). Friedmann said he is also seeing canceled China-bound shipments in the agriculture sector. Shippers agreed that US exporters — and farmers in particular — are especially vulnerable to the new tariffs and reciprocal responses from China, adding that the impacts from tariffs implemented during President Donald Trump’s first term can still be felt in many markets. “We’re obviously really concerned,” said Mike Steenhoek, executive director of the Soybean Transportation Coalition. “People have been debating about the impact of these tariffs, [and] some people will say [that we’re speculating] ... It’s not speculation. It’s recollection. When we look at what happened in 2018 and 2019, we still haven’t recovered.”<h3>Cold chain stability, for now</h3>Despite the tariff-related hurdles for many US exporters, there are still calm spots, for now. A forwarding source in refrigerated exports said the cold chain market has been largely stable thus far.“We haven’t really seen such a change when it comes to the tariffs because these are planned so far ahead, and production is scheduled around them,” said the forwarder, who added that impacts to even their China-bound shipments were minimal.Friedmann agreed that many time-sensitive agriculture exports are less flexible, so many shipments are still moving forward. But they are being met with the potential for schedule reliability hurdles. “A lot of the steamship lines are canceling, blanking, delaying, [and] changing routes,” he said. “So, we are not going to have the same ocean transportation options we’re used to. Even if [customers] want to buy it, we’re still going to have increased difficulty delivering it.”Contact Laura Robb at <a href="mailto:Laura.Robb@spglobal.com">laura.robb@spglobal.com</a>. </div>

Chinese buyers have begun to cancel orders of goods and commodities from US exporters amid the escalating trade conflict between the two nations, and stakeholders expect the cancellations to continue until the battle over tariffs is resolved. Exporters also expect they will need redirect their cargo to other Asian countries to make up for the diminished Chinese market. M. Can Fidan, vice president of business development at New York-based MTS Logistics, told the Journal of Commerce he’s already seen the cancellation of 250 polymers containers and another customer’s entire fertilizer order. “If these tariffs stay, there is no way China will keep buying these products from us,” said Fidan. The export decline is already showing up in data. Bookings for US exports to China for the week of April 8–15 were down 5.4% from the prior week at 17,220 TEUs, according to maritime visibility provider Vizion and data and analytics company Dun & Bradstreet. Two exporters, five forwarders and the head of a shipping group who spoke to the Journal of Commerce said a further drop in China-bound volumes is inevitable if tariffs on China persist, mirroring the market shift already observed with imports . “If they had contracts to [export containers to China], my assumption would be that a lot of them would likely be canceled,” one exporter said. Another non-vessel-operating common carrier source said they are seeing cancellations on many China-bound exports, especially goods with lower margins where the buyers cannot afford the additional cost. At the same time, the source is seeing sellers of more valuable commodities attempt to pass down the cost to their customers. Meanwhile, several forwarders said demand is strong from other countries that have had their reciprocal US import tariffs paused for 90 days. Shippers and forwarders are forecasting a pickup in export cargo volumes bound for other Southeast Asia countries. “In [the] short term, I think we’re going to see a lot of agriculture sourcing shift [from China] to other countries,” said Peter Friedmann, executive director of the Agriculture Transportation Coalition (AgTC). Friedmann said he is also seeing canceled China-bound shipments in the agriculture sector. Shippers agreed that US exporters — and farmers in particular — are especially vulnerable to the new tariffs and reciprocal responses from China, adding that the impacts from tariffs implemented during President Donald Trump’s first term can still be felt in many markets. “We’re obviously really concerned,” said Mike Steenhoek, executive director of the Soybean Transportation Coalition. “People have been debating about the impact of these tariffs, [and] some people will say [that we’re speculating] ... It’s not speculation. It’s recollection. When we look at what happened in 2018 and 2019, we still haven’t recovered.” Cold chain stability, for now Despite the tariff-related hurdles for many US exporters, there are still calm spots, for now. A forwarding source in refrigerated exports said the cold chain market has been largely stable thus far. “We haven’t really seen such a change when it comes to the tariffs because these are planned so far ahead, and production is scheduled around them,” said the forwarder, who added that impacts to even their China-bound shipments were minimal. Friedmann agreed that many time-sensitive agriculture exports are less flexible, so many shipments are still moving forward. But they are being met with the potential for schedule reliability hurdles. “A lot of the steamship lines are canceling, blanking, delaying, [and] changing routes,” he said. “So, we are not going to have the same ocean transportation options we’re used to. Even if [customers] want to buy it, we’re still going to have increased difficulty delivering it.” Contact Laura Robb at laura.robb@spglobal.com .

Transport, Trade and Regulation News

US exporters see rise in canceled orders from Chinese buyers amid trade war

<div class="phx-topic abstract-wrapper">The US Trade Representative (USTR) laid out actions to counter China’s maritime dominance that could put Cosco Shipping and subsidiary OOCL on the hook for millions when their ships call the US. </div>

The US Trade Representative (USTR) laid out actions to counter China’s maritime dominance that could put Cosco Shipping and subsidiary OOCL on the hook for millions when their ships call the US.

<div class="phx-topic">The US Trade Representative (USTR) has narrowed the scope of its tariffs against China’s maritime industry to a fee based on the cargo capacity or container volume of Chinese-operated and -built ships entering US ports. The more targeted actions follow industry warnings that earlier proposals <a href="https://www.joc.com/article/us-port-tax-would-scramble-ocean-services-raise-shipper-costs-drewry-5952046">would increase costs for US shippers and pose an existential threat to smaller ports</a>, but China-based ocean carriers could still face millions in fees under the tariffs. In its list of tariff actions that take effect Oct. 14, the USTR said Chinese ocean carriers will be subject to a fee of $50 per net ton of capacity upon arrival at a US port. The fee will go up to $80 after one year, rising each year before topping out at $140 in 2028. Net tonnage measures a ship’s overall cargo capacity, regardless of vessel type. The fee will only be charged at the first port of call on a vessel string and will not stack on top of other port calls. The fee will only be charged five times per year on each vessel. Ocean carriers based outside of China operating Chinese-built ships will face a fee based on either net tonnage or container volume, whichever is higher. Ships built in other countries will not face the same fees, nor will fees be assessed based on the percentage of Chinese-built ships in a carrier’s fleet or orders at Chinese shipyards. The tonnage fee for non-Chinese carriers starts at $18, escalating to $23 by April 2026 and topping out at $33 in 2028. The per-container fee starts at $120 and rises to $153 next year and $250 in 2028. Non-Chinese ocean carriers will be able to waive the fee if they take delivery of a US-built ship of at least the same size within three years. The fees will not apply to Chinese-built ships in US-flag fleets, container ships that are 4,000 TEUs or smaller, voyages of less than 2,000 nautical miles or Chinese-built ships owned by US-based carriers. The capacity-based tariffs come after a series of proposals that included fees of up to $1.5 million based on US port calls by Chinese carriers and similar fees on non-Chinese ocean carriers with Chinese-built ships in their fleets and orders at Chinese shipyards. Other proposals included an export cargo preference for US-built ships. After two days of hearings, <a href="https://www.joc.com/article/ustrs-china-tonnage-tax-would-squeeze-smaller-trades-stakeholders-5967638">the USTR said it wanted to reduce the potential impact on US shippers</a>, particularly exporters and dry-bulk shippers. Still, the USTR plans tariffs based on the capacity of China-built ships and will still charge fees on that country’s ocean carriers. The goal of the fees is “to further disincentivize use of Chinese shipping services,” the USTR said. <h3>Cosco, OOCL in crosshairs </h3>The USTR’s fees will have the largest impact on ships operated by Cosco Shipping and its subsidiary Orient Overseas Container Line (OOCL). For example, the 13,092-TEU Cosco Hope made five calls to the Port of New York and New Jersey over the last 12 months as part of the Ocean Alliance’s Liberty Bridge service from Europe to the US East Coast, according to Sea-web, a sister company of the Journal of Commerce within S&amp;P Global. With a net tonnage of 63,544 tons, according to Sea-web, the Cosco Hope would have incurred a fee of $3.2 million for each port call. A similar capacity ship operated by a non-Chinese carrier would result in a fee of about $1 million per call. The 13,386-TEU Cosco Italy made 10 calls to the Port of Long Beach during the same period as part of Ocean Alliance’s Hibiscus Express service, Sea-web data show. Its net tonnage would put its fee at $3.3 million per call. The 16,828-TEU OOCL Bauhinia made three port calls to Long Beach as part of the South China Pacific Service. Its net tonnage would result in a fee of $2.8 million per call, according to the USTR’s formula. Contact Michael Angell at <a href="mailto:michael.angell@spglobal.com">michael.angell@spglobal.com</a>. </div>

The US Trade Representative (USTR) has narrowed the scope of its tariffs against China’s maritime industry to a fee based on the cargo capacity or container volume of Chinese-operated and -built ships entering US ports. The more targeted actions follow industry warnings that earlier proposals would increase costs for US shippers and pose an existential threat to smaller ports , but China-based ocean carriers could still face millions in fees under the tariffs. In its list of tariff actions that take effect Oct. 14, the USTR said Chinese ocean carriers will be subject to a fee of $50 per net ton of capacity upon arrival at a US port. The fee will go up to $80 after one year, rising each year before topping out at $140 in 2028. Net tonnage measures a ship’s overall cargo capacity, regardless of vessel type. The fee will only be charged at the first port of call on a vessel string and will not stack on top of other port calls. The fee will only be charged five times per year on each vessel. Ocean carriers based outside of China operating Chinese-built ships will face a fee based on either net tonnage or container volume, whichever is higher. Ships built in other countries will not face the same fees, nor will fees be assessed based on the percentage of Chinese-built ships in a carrier’s fleet or orders at Chinese shipyards. The tonnage fee for non-Chinese carriers starts at $18, escalating to $23 by April 2026 and topping out at $33 in 2028. The per-container fee starts at $120 and rises to $153 next year and $250 in 2028. Non-Chinese ocean carriers will be able to waive the fee if they take delivery of a US-built ship of at least the same size within three years. The fees will not apply to Chinese-built ships in US-flag fleets, container ships that are 4,000 TEUs or smaller, voyages of less than 2,000 nautical miles or Chinese-built ships owned by US-based carriers. The capacity-based tariffs come after a series of proposals that included fees of up to $1.5 million based on US port calls by Chinese carriers and similar fees on non-Chinese ocean carriers with Chinese-built ships in their fleets and orders at Chinese shipyards. Other proposals included an export cargo preference for US-built ships. After two days of hearings, the USTR said it wanted to reduce the potential impact on US shippers , particularly exporters and dry-bulk shippers. Still, the USTR plans tariffs based on the capacity of China-built ships and will still charge fees on that country’s ocean carriers. The goal of the fees is “to further disincentivize use of Chinese shipping services,” the USTR said. Cosco, OOCL in crosshairs The USTR’s fees will have the largest impact on ships operated by Cosco Shipping and its subsidiary Orient Overseas Container Line (OOCL). For example, the 13,092-TEU Cosco Hope made five calls to the Port of New York and New Jersey over the last 12 months as part of the Ocean Alliance’s Liberty Bridge service from Europe to the US East Coast, according to Sea-web, a sister company of the Journal of Commerce within S&P Global. With a net tonnage of 63,544 tons, according to Sea-web, the Cosco Hope would have incurred a fee of $3.2 million for each port call. A similar capacity ship operated by a non-Chinese carrier would result in a fee of about $1 million per call. The 13,386-TEU Cosco Italy made 10 calls to the Port of Long Beach during the same period as part of Ocean Alliance’s Hibiscus Express service, Sea-web data show. Its net tonnage would put its fee at $3.3 million per call. The 16,828-TEU OOCL Bauhinia made three port calls to Long Beach as part of the South China Pacific Service. Its net tonnage would result in a fee of $2.8 million per call, according to the USTR’s formula. Contact Michael Angell at michael.angell@spglobal.com .